Air Canada's fundamentals remain strong, despite cost creep
Air Canada is fully leveraging its ability to capitalise on what it deems as still-strong international demand, and the company's push into long haul markets appears to be paying off, because international routes are bolstering the airline's revenues. The airline arguably has a unique strength as Canada's largest international airline - and that position is paying off.
The airline has also strengthened its balance sheet, reflected in its leverage ratios falling to pre-pandemic levels of 1.1x EBITDA, compared with a ratio of 5.1x as the end of 2022.
But the company is also facing cost headwinds in 2024 that could overshadow its prospects, and a return to normal cost trends is tough to predict.
Yet Air Canada's entrenched stature as Canada's largest airline, in an evolving environment in the country, remains a core strength that shows few signs of weakening.
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