Is it right time to buy Air Canada (TSX: AC) stock?

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Is it right time to buy Air Canada (TSX: AC) stock?

Is it right time to buy Air Canada (TSX: AC) stock?
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Highlights

  • Air Canada (TSX: AC) is gaining traction on the markets once again with its stock rising as high as C$ 21.31 during the trading session on Tuesday, March 15.
  • Air Canada improved its operating capacity, measured in terms of available seat miles (ASM), by 134 per cent year-over-year (YoY) in Q4 FY2021.
  • As COVID restrictions are slowly waning away, the airline company could see business recovery.

Air Canada (TSX: AC) is gaining traction on the markets once again with its stock rising as high as C$ 21.31 during the trading session on Tuesday, March 15.

While there has been no latest news from the airline's side, easing COVID restrictions across Canada may have something to do with the positive movement in its stock prices.

Now, let us evaluate Air Canada's overall performance.

Air Canada (TSX: AC) 's financial performance in Q4 FY2021

Air Canada improved its operating capacity, measured in terms of available seat miles (ASM), by 134 per cent year-over-year (YoY) in Q4 FY2021. However, compared to its pre-pandemic levels in Q4 FY2019, its ASM capacity was still down by 47 per cent in Q4 FY2021.

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The airline said that its passenger revenues surged by more than four times to C$ 2.04 billion in the latest quarter. Its operating revenues swelled by C$ 1.9 billion YoY to C$ 2.73 billion in Q4 FY2021.

The C$ 7-billion market cap company posted a net loss of C$ 493 million in the latest quarter, marking a notable improvement from a loss of C$ 1.16 billion in Q4 FY2020.

Air Canada (TSX: AC) Q4 FY2021 results

Air Canada's stock performance

Air Canada saw its stock close higher at C$ 21.2 apiece, up by almost four per cent, on Tuesday, having expanded by about six per cent in the last one week. 

Bottomline

The pandemic outbreak significantly impacted Air Canada's business. As COVID restrictions are slowly waning away, the airline company could see business recovery. However, rising jet fuel prices are another big challenge affecting its operations and profit margins.

Thus, investors should track the latest news and developments that could impact the airline's performance in any way before delving into any investment decisions.

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Please note, the above content constitutes a very preliminary observation based on the industry, and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.

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