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Summary
- Stocks of Air Canada grew by nearly 35 per cent in the last five weeks.
- One of the factors that may be behind this spike is the recent development in its Aeroplan program.
- The stocks also grew nearly 10 per cent in March-to-date.
Stocks of Air Canada grew by nearly 35 per cent in the last five weeks. One of the factors that may be behind this spike is the recent development in its Aeroplan program.
Aeroplan, which is a coalition loyalty program that Air Canada created back in July 1984, announced on Monday, March 8, that it has struck a deal with coffee giant Starbucks. As per this contract, Aeroplan users from now on will be able to earn and redeem reward points at Starbucks.
Air Canada said in its official statement that Aeroplan members have expressed enthusiasm about this latest update and have shown interest in having more such opportunities to earn reward points.
The trending stock of Air Canada slipped into the red zone on Tuesday, March 9, dipping by about a per cent. Its year-to-date level, however, reflects a growth of about 21 per cent.
Air Canada eyeing for a bailout?
Year 2020 has been a challenging year for the aviation industry, and Air Canada was no exception. Stringent travel restrictions and suspension of operations in various routes amid the pandemic caused a great deal of loss for the company. In its latest quarter (Q4 2020), the top Canadian flyer reported a 70 per cent year-over-year decline in its revenue of C$5.833 billion and a negative EBITDA of C$ 2.043 billion.
©Kalkine Group 2020
Air Canada has been at the forefront of seeking aviation-specific financial support from the federal government. Its former CEO Calin Rovinescu, during the Q4 conference call with shareholders, expressed optimism about such a support package.
Investing in Air Canada
Aeroplan’s new deal with Starbucks is one of the many small steps that Air Canada is taking to attract more passengers. The possibility of a government financial bailout has also fueled an increase its share price, which grew nearly 10 per cent in March-to-date.
As Canada eyes an economic recovery this year amid a ramped-up vaccine rollout, the country’s top aviation company is also hoping for renewed investor confidence.
