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Highlights
- With the Canadian economy slowly reopening amid increased COVID-19 vaccination campaigns, some market experts believe that the country’s airline industry could hit their pre-pandemic air travel levels.
- A Canadian airline saw its operating revenue expand by almost three times from the same period last year in the third quarter of fiscal 2021.
- An airline stock grew by about 34 per cent in the past 12 months.
With the Canadian economy slowly reopening amid increased COVID-19 vaccination campaigns, some market experts believe that the country’s airline industry could hit their pre-pandemic air travel levels.
This observation comes as relaxed quarantine rules have left people feeling more comfortable with flying cross-country and abroad.
If passengers continue to feel safe about travelling, especially during holiday season, this rebound in air travel could continue in the next year as well, considering the omicron variant does not become an issue.
That said, let us explore three Canadian airline stocks listed on the TSX.
Also read: 2 Canadian aviation stocks to buy in Q4 2021
1. Air Canada (TSX: AC)
Air Canada, the country’s primary airline, saw a significant surge in its key passenger geographic segments and cargo performance in Q3 FY2021.
The airline posted an operating revenue of C$ 2.1 billion in the third quarter of fiscal 2021, which was nearly three times higher than that of C$ 757 million in the same quarter a year ago.
The Montreal-headquartered firm saw a net cash flow of C$ 153 million in the latest quarter, which was a notable improvement from the management’s expectation of C$ 280 billion to C$ 460 billion in net cash burn.
Air Canada also plans to expand its available seat miles (ASM) capacity by around 135 per cent year-over-year (YoY) in the fourth quarter of FY2021.
Image source: © 2021 Kalkine Media Inc
Data source: Air Canada
The airline stock closed at C$ 21.2 apiece on Monday, November 29, slightly up from its previous close.
2. Transat A.T. Inc (TSX:TRZ)
Transat A.T. Inc, which is an integrated air travel company that operates in the tourism industry, saw a revenue surge of 31.4 per cent YoY to C$ 12.5 million in the third quarter of FY2021. This growth, the company said, was primarily due to its incoming tour operations in some destinations.
Its operating loss amounted to C$ 98.4 million in the latest quarter, which marked an improvement of C$ 33.6 million from a loss of C$ 132 million incurred in the same quarter a year ago.
As on July 31 this year, it posted a cash and cash equivalents of C$ 429.4 million, while its deposits from customers for future travel was C$ 262 .8 million.
Transat’s stock soared by nearly three per cent on a month-to-date (MTD) basis and closed at C$ 4.52 apiece November 29.
3. WestJet Airlines Ltd (TSX: ONEX)
WestJet Airlines Ltd, which was purchased by ONEX Corporation in 2019, has been in the airline business since 1996.
Its owner, a Toronto-based private equity investor and asset manager, posted total net earnings of C$ 607 million in the third quarter of fiscal 2021, which included C$ 493 million from the investing segment.
ONEX stock grew by about 34 per cent in the past 12 months and closed at C$ 95.61 apiece on November 29.
The C$-8.3 billion market cap company is set to dole out a quarterly dividend of C$ 0.10 per share on January 31.
Also read: Top 5 Canadian industrial stocks to buy in Q4 2021
Bottom line
While most airline companies have been inching towards their pre-pandemic travel levels, the new COVID-19 variant of omicron is starting to trigger fear and anxiety among people once again.
In case some travel restrictions come back in the wake of omicron’s emergence, investors need to be mindful before venturing into any air travel stock as the variant could lead to a decline in the aviation industry.
