Post by
Tempo1 on Sep 12, 2024 4:50pm
RBC: AC Flash report
Connecting The Dots: AC flash read-through - Transat misses on lower yields
Our take: We view today's update from Transat as a neutral read-through for Air Canada. Transat highlighted downward pressure on yields (down -9.7%) due to intensified competition and overcapacity throughout the industry as well as consumers who are increasingly price-conscious given the economic climate. Management also flagged that Q4 QTD yields are down -10%, with load factors up slightly, pointing to continued weakness in August and September. While we view the weaker yield commentary as in line with AC's updated guide and our expectations for AC in H2, we view commentary on overcapacity in the Canadian marketplace (even with the loss of two LCCs this year) and peers committing to continued route expansion looking ahead as adding risk to our and consensus 2025 estimates for AC. We will listen to the Transat call at 10am looking for further colour.