Air Canada T.AC

Alternate Symbol(s): ACDVF

Industrials Airlines

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.

TSX:AC - Post by User

Air Canada

Bullboard Posts

Comment by rochester3on May 11, 2015 5:34pm

320 Views

Post# 23716844

RE:I'm still holding long and strong !!! Go AC

AC reported a solid finish to its Q1 traffic with March RPMs up 12.9%. This resulted in Q1 traffic up 10.9% on capacity increase of 9.3%. This led to a 120
bps increase in load factor to 81.5%. The strength in traffic was driven mainly
by AC's international business with US Transborder, Atlantic, and LATAM/ Caribbean segments all showing solid double-digit RPM increases in Q1. However, domestic loads were also up 140 bps YOY on 3.8% traffic growth.

Most of the ASM and RPM increase is coming from leisure and longer stage length segments. This, in addition to strong competition in sun markets, should
continue to pressure yield and we are reducing our Q1 estimate by a further 80
bps to -3.8%. Nonetheless, the traffic results are much better than our
expectations so we are raising our Q1 EBITDAR estimate by 11% to $368M. Margin expansion remains AC's primary focus and we expect to see 650 & 450 bps expansion in Q1 and FY2015, respectively.

We expect AC shares to react well to this traffic release as it should help to
allay investor fears with regard to a weaker demand environment, particularly in Alberta. We peg AC's exposure to Alberta at ~10% of total ASMs so it is very manageable, in our view. We remain bullish on AC shares with a $17 target price.

.Recent Update
. We are raising our Q1 EBITDAR estimate after strong March traffic.