Air Canada’s stock price hit its lowest level in a year on Wednesday as the airline faces rising fuel costs, competition and interest rates.
The company’s stock was down nearly three percentage points at $17.29 at midday on the Toronto Stock Exchange, its lowest price since mid-October of last year, and a decline by a third from its recent peak in July – a trend seen across the North American airline industry.
On Monday, Raymond James analyst Savanthi Syth lowered his profit forecasts for the Montreal company due to the rise in jet fuel prices over the past three months.
She noted that competition had increased with Porter Airlines, Flair Airlines and Lynx Air on domestic, transborder and sun routes, but added Air Canada’s frequent flyer program and its fuel-efficient planes were a advantage.
In an interview, analyst Chris Murray of ATB Capital Markets noted that concerns persist about consumers’ willingness to continue spending on travel amid higher interest rates and inflation.
Nevertheless, he believes that Air Canada appears well placed in the medium term. The company notably returned to profitability in the spring and early summer, when revenues hit a record second quarter, topping $5.4 billion.
