October 19, 2023 By The Canadian Press
MONTREAL — Air Canada’s share price hit a one-year low on Wednesday as the airline navigates higher fuel costs, competition and interest rates.
The company’s stock slipped 3.49 per cent to close at $17.13, marking its lowest price since Oct. 12, 2022, and a one-third drop from its recent peak in July _ part of a pattern seen across the North American airline sector.
On Monday, Raymond James analyst Savanthi Syth lowered her earnings forecast for the Montreal-based company due to the run-up in jet fuel prices over the past three months.
She noted steeper competition with Porter Airlines, Flair Airlines and Lynx Air on domestic, cross-border and sun destination routes, but pointed to Air Canada’s loyalty program and fuel-efficient planes as an advantage.
In an interview, ATB Capital Markets analyst Chris Murray said worries also persist over consumers’ willingness to keep spending on travel amid higher interest rates and inflation.
Nonetheless, he says Air Canada looks well-placed in the medium term after the airline roared back to profitability in the spring and early summer, when revenues hit a second-quarter record that topped $5.4 billion.