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Air Canada T.AC

Alternate Symbol(s):  ACDVF

Air Canada is an airline company. The Company is a provider of scheduled passenger services in the Canadian market, the Canada-United States (U.S.) transborder market and the international market to and from Canada. It provides scheduled service directly to more than 180 airports in Canada, the United States and internationally on six continents. The Company’s Aeroplan program is Canada's premier travel loyalty program, where members can earn or redeem points on the airline partner network of 45 airlines, plus through a range of merchandise, hotel and car rental rewards. Its freight division, Air Canada Cargo, provides air freight lift and connectivity to hundreds of destinations across six continents using its passenger and freighter aircraft. Its Air Canada Vacations is a tour operator, which is engaged in developing, marketing, and distributing vacation travel packages in the outbound/inbound leisure travel market. Air Canada Rouge is Air Canada's leisure carrier.


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Post by lb1temporaryon Jan 18, 2021 10:17pm
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Post# 32323720

More from CIBC

More from CIBCFind in second transportation weekly:

Household Savings A Positive Indicator For Travel – Transportation & Aerospace Weekly

Key Points

The airline industry faces a challenging H1/21, even more so than we had envisioned just a few weeks back; expectations are for air traffic demand to see little improvement in Q1/21. One of the consequences of the government lockdown measures has been a jump in household savings driven by a decline in consumption along with government support programs. In Q3/20, Canada's household savings rate sat at 14.6%, and while down from Q2/20 levels, it remains at historically high levels. As a result, our CIBC Economics team notes that this should drive a strong rebound in service spending as the economy re-opens. To quote our economists, "excess cash leaves many Canadians in a position to indulge a bit more than any trends would suggest." The savings that have been built up by households should favor the service sector given goods spending has been above average during the pandemic.

We see travel benefiting from the historically high household savings rates along with the desire by individuals to take vacation after more than a year of staying home. We do see a positive relationship between personal savings rates and air traffic. Looking at U.S. data from 1960 to 2019, using a twoyear lag there is 47% positive correlation between these two variables. This is another data point that supports our view that air passenger traffic will see a strong rebound concurrent with economies re-opening. We see 2021 as a year of two halves for the airline sector – continued challenges in H1/21 followed by a significant improvement in demand in H2/21.
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