There’s good news today for Canadian air travelers, as Canadian airline Air Canada (TSE:AC) has snatched victory from the jaws of defeat and offered up a tentative agreement that will keep the airline flying for at least the next while. And investors greeted it with confidence and downright joy, sending shares up nearly 4% in Monday morning’s trading.
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While Air Canada is not out of the woods yet as far as strike action goes—the tentative agreement needs to be ratified by the union after all—the strike action is defused. This means that around 670 flights per day will continue to run as normal, heading all over the planet, and freight operations will continue apace.
The union vote, meanwhile, will take place over the next month, so it may be mid-October before we hear anything further about Canadian airline troubles for the next few weeks. Air Canada declared that the new agreement “…recognizes the contributions and professionalism of Air Canada’s pilot group, while providing a framework for the future growth of the airline.” It remains to be seen if the pilots agree.
And Just In Time, Too
Hopefully, the union will take Air Canada up on its offer because Air Canada will need all the pilots it can get. Air Canada is adding new U.S. routes next summer. Air Canada will go from Toronto to Jacksonville, Florida, starting May 22, 2025. That same day, it will also see a flight out of Montreal heading for Cincinnati/Northern Kentucky International Airport.
The flights will not exactly be large; both will run on Bombardier (TSE:BBD.B) CRJ-900 aircraft with room for 76 seats, including 12 “business class” seats. The rest are economy class. But still, it will be a new revenue stream for Canadians interested in traveling to the wilds of Kentucky or looking for a new path to Florida.
Is Air Canada a Good Stock to Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on TSE:AC stock based on 11 Buys and two Holds assigned in the past three months, as indicated by the graphic below. After an 18.59% loss in its share price over the past year, the average TSE:AC price target of C$23.11 per share implies 41% upside potential.
