Go Back  FlyerTalk Forums > Miles&Points > Airlines and Mileage Programs > Air Canada | Aeroplan
Reload this Page >

What drives Air Canada's stock price?

What drives Air Canada's stock price?

Old May 2, 2024, 5:08 pm
  #571  
Moderator, Air Canada; FlyerTalk Evangelist
 
Join Date: Feb 2015
Location: YYC
Programs: AC SE MM, FB Plat, WS Plat, BA Silver, DL GM, Marriott Plat, Hilton Gold, Accor Silver
Posts: 16,861
Large US airline stocks were up about 2% today. AC was down over 8%. Not a great day.
Adam Smith is offline  
Old May 2, 2024, 9:35 pm
  #572  
 
Join Date: Sep 2005
Location: YYC
Programs: AC SE100*1MM; Spire Ambassador
Posts: 1,343
The current management of AC seems incompetent…in comparison with Calin Rovinescu.

I was out this morning, dumping all my shares at a huge loss, after the last 3-4 years of foolishly and desperately wishful thinking of AC returning to the glorious days.
lespoir is offline  
Old May 2, 2024, 9:39 pm
  #573  
 
Join Date: Jan 2016
Location: YYZ
Programs: Only J via Peasant Points, 777HDPeasant or The Unexpected Virtue of Ignorance and Narcissism.
Posts: 6,004
Originally Posted by lespoir
The current management of AC seems incompetent…in comparison with Calin Rovinescu.

I was out this morning, dumping all my shares at a huge loss, after the last 3-4 years of foolishly and desperately wishful thinking of AC returning to the glorious days.
If you look at their fleet planning, it would almost seem they are looking at muted growth for 2025 as well (recession planning?)
Q2 might be worse given there is no fuel cost reprieve anymore..

The only upside might be massive influx of pop growth that may hold the yields.... maybe...
Jumper Jack is online now  
Old May 2, 2024, 11:07 pm
  #574  
 
Join Date: Nov 2018
Location: Vancouver
Programs: AC SE100K 1MM, FB Platinum, Bonvoy Platinum Elite, IHG Gold Elite, Hilton Gold
Posts: 1,645
Originally Posted by lespoir
The current management of AC seems incompetentin comparison with Calin Rovinescu.

I was out this morning, dumping all my shares at a huge loss, after the last 3-4 years of foolishly and desperately wishful thinking of AC returning to the glorious days.
Agreed. The present CEO seems much less capable that Rovinescu who did a very respectable job of bringing AC to a place of solid financial performance. Despite an increase in revenues, AC's cost increase is really outstripping their rise in revenues which does not bode well for when the new labour agreements get negotiated.
EdmFlyBoi is offline  
Old May 3, 2024, 5:15 am
  #575  
 
Join Date: Jun 2016
Programs: air miles
Posts: 294
Looking deeper at the numbers:
  • General revenues were UP 6.9% from Q1 23, supported by
    • Passenger revenues UP 8.7%
    • Cargo revenues DOWN 9.7%
  • Expenses UP 6.3%
    • Fuel costs DOWN 8.8%
    • Wages UP 21.2%
  • Operating income UP 164.7%

So what was the market expecting. Sure wages increase substantially outside the range of income growth (however I believe a new contract was signed recently which may explain that)

The other non tax large expense the company has incurred was a $46 million loss on "debt settlements" which appears to be costs related to retirement and reissuing on some revolving credit facilities. Regardless this would seem to be a one time (or rare) instance.

Remove that and the company's EBIT becomes a loss of $19 million compare to Q1 23's loss of $23 million an improvement of 17.4%

So I wonder what was the market expecting?
JustSomeGuy1978 is offline  
Old May 3, 2024, 8:46 am
  #576  
 
Join Date: Dec 2002
Posts: 8,045
Did wages go up 21% or employee costs go up 21%?
Not the same thing.

There are more employees doing less to help with the operational challenges of a couple years ago.
tracon is online now  
Old May 3, 2024, 8:48 am
  #577  
FlyerTalk Evangelist
 
Join Date: Jun 2003
Location: YYC
Posts: 23,871
Originally Posted by JustSomeGuy1978
Looking deeper at the numbers:
  • General revenues were UP 6.9% from Q1 23, supported by
    • Passenger revenues UP 8.7%
    • Cargo revenues DOWN 9.7%
  • Expenses UP 6.3%
    • Fuel costs DOWN 8.8%
    • Wages UP 21.2%
  • Operating income UP 164.7%

So what was the market expecting. Sure wages increase substantially outside the range of income growth (however I believe a new contract was signed recently which may explain that)

The other non tax large expense the company has incurred was a $46 million loss on "debt settlements" which appears to be costs related to retirement and reissuing on some revolving credit facilities. Regardless this would seem to be a one time (or rare) instance.

Remove that and the company's EBIT becomes a loss of $19 million compare to Q1 23's loss of $23 million an improvement of 17.4%

So I wonder what was the market expecting?
Which brings back some sense of reality to the discussion.

Rather than a blanket statement whereby current management is "incompetent." Uninspired, definitely, prone to put his foot in his mouth, yes. But I would argue that there is no case to be made either way on incompetence.
Stranger is offline  
Old May 3, 2024, 8:53 am
  #578  
FlyerTalk Evangelist
 
Join Date: Jan 2002
Location: Canada
Programs: UA*1K MM SK EBG LATAM BL
Posts: 23,387
https://ca.finance.yahoo.com/news/ai...l?guccounter=1

Air Canada (AC.TO) reported a wider loss than analysts expected in the first quarter of the year, as costs climbed and pent-up demand slowed, sending the airline's shares down nine per cent on Thursday.
rankourabu is offline  
Old May 3, 2024, 9:18 am
  #579  
FlyerTalk Evangelist
 
Join Date: Mar 2005
Location: YYZ
Programs: AC*SE 2MM
Posts: 16,719
Originally Posted by JustSomeGuy1978
The other non tax large expense the company has incurred was a $46 million loss on "debt settlements" which appears to be costs related to retirement and reissuing on some revolving credit facilities. Regardless this would seem to be a one time (or rare) instance.

Remove that and the company's EBIT becomes a loss of $19 million compare to Q1 23's loss of $23 million an improvement of 17.4%
There was also $20 million associated with getting out of the delivery of two cargo 767's now that the cargo market has stalled.

Originally Posted by tracon
Did wages go up 21% or employee costs go up 21%?
Not the same thing.
The latter. The MD&A also mentioned a significant part of this related to accruals for profit sharing with employees.
Bohemian1 likes this.
The Lev is offline  
Old May 3, 2024, 9:31 am
  #580  
 
Join Date: Sep 2023
Posts: 439
As per the article in the Globe this morning 3 analysts have still raised their target price to the $30 range. This is due to the strong balance sheet (cash and low leverage) and a still positive outlook. The market is very fickle on a short term basis, reacting to any and every hiccup it hears.

Last edited by Wigg; May 3, 2024 at 10:47 am
Wigg is online now  
Old May 3, 2024, 10:22 am
  #581  
 
Join Date: Jun 2016
Programs: air miles
Posts: 294
Originally Posted by tracon
Did wages go up 21% or employee costs go up 21%?
Not the same thing.

There are more employees doing less to help with the operational challenges of a couple years ago.
"Wages, salaries, and benefits"
JustSomeGuy1978 is offline  
Old May 3, 2024, 1:50 pm
  #582  
 
Join Date: Oct 2012
Location: YVR
Programs: AC E75K, IHG Plat, Bonvoy Tit, HH Silver, BW Gold, Avis President's Club
Posts: 232
Originally Posted by Wigg
As per the article in the Globe this morning 3 analysts have still raised their target price to the $30 range.
I hope they're right! I took the opportunity to pick up some shares yesterday to get my DCA down. I suspect it will bounce back at least somewhat when summer flying season comes along and yields remain high.
Eagle2000 likes this.
YVR4Ever is offline  
Old May 5, 2024, 5:15 pm
  #583  
 
Join Date: Sep 2005
Location: YYC
Programs: AC SE100*1MM; Spire Ambassador
Posts: 1,343
Originally Posted by Wigg
As per the article in the Globe this morning 3 analysts have still raised their target price to the $30 range. This is due to the strong balance sheet (cash and low leverage) and a still positive outlook. The market is very fickle on a short term basis, reacting to any and every hiccup it hears.
these are completely technical estimates by analysts, which are based on many assumptions in the analysis (my last ten years of career journey was all about this kind of technical analysis).

the point is that, yes, it is possible that AC may hit to $30, sometime. That my my expectations for the last two years, and it never got there. In many ways, stock market dynamics can be triggered by many things, and a major one is investors psychology, the confidence feeling about a company whose in may suggest the story this company is telling is convincing or not (convincing is not equal to true).

in ACs situation, most investors seem to hold a deep doubt on ACs performance, so it is very difficult to get over this psychological hurdle. Aviation/airlines has always been a rough sector to attract investors, so you have to be almost No. 1, in order to stand out.

AC has this major pilot contract negotiation on-going, and the pilots demand to match the similar agreement with huge pay raises, like Deltas pilots.

Another major heavy weight that drags down Air Canada is its aircraft debt. So despite the last few quarters earnings reports, which is usually the crafted PowerPoint and nicely modeled Excel numbers, vs. consistent long term results of net earnings and debt payments. I am just afraid it would take much longer to overcome common street investors to jump in.
tomvancouver likes this.
lespoir is offline  
Old May 29, 2024, 9:32 am
  #584  
 
Join Date: Mar 2007
Posts: 4,786
back to $17.7's
dragged down by American Airlines AAL -15% after earnings
jerryhung is offline  

Thread Tools
Search this Thread

Contact Us - Manage Preferences Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service -

This site is owned, operated, and maintained by MH Sub I, LLC dba Internet Brands. Copyright © 2024 MH Sub I, LLC dba Internet Brands. All rights reserved. Designated trademarks are the property of their respective owners.