Air Canada attempts to steer investors to contemplate long term metrics as its valuation falls

Air Canada plans to deploy the bulk of its 2016 capacity growth to international markets, after having cut some capacity in Western Canada during 2015. The airline is less exposed to that region than rival WestJet, which is headquartered in Western Canada and is projecting steep unit revenue declines in early 2016 due to weakness from lower demand in the oil and gas sector.

Air Canada embarked on the year 2016 by placing a letter of intent to purchase 45 Bombardier CSeries jets. In parallel, the Quebec government (which now has a stake in the CSeries) dropped a lawsuit against the airline related to aircraft maintenance performed in the province. However, Air Canada contends that it faced no political pressure to place an order for the beleaguered CSeries. Air Canada's order gives the Canadian manufacturer a dependable national customer now that Porter's order remains in doubt, and the aircraft's other North American customer, Republic Airways Holdings, has entered bankruptcy protection.

After trading at a discount for most of 2015 Air Canada has opted not to provide yield, unit revenue or capacity guidance on a quarterly or annual basis. The company's rationale for the decision is a focus on its long-term strategy laid out to its investors in mid-2015, with specific ROIC, ratio and EBITAR margin targets. The company has emphatically stated that if short-term investors are not happy with the new policy, they are free to look elsewhere.