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Highlights
- Canadian airline WestJet laid out its strategic growth plans on June 16.
- Onex saw distributable earnings of US$ 25 million inQ1 2022, higher than a loss of US$ 3 million in Q1 2021.
- Air Canada won five awards, in total, from Global Traveler and WhereverFamily on June 1.
Canadian airline WestJet laid out its strategic growth plans to expand its presence and network in Western Canada. The airline will renew its focus on a highly productive 'low-cost' structure to improve affordability for passengers and realign its 787 Dreamliner fleet around Western Canada.
The low-cost carrier is focused on ensuring its ability to meet the high volume of 'pent-up' travel demand of Summer 2022, said WestJet CEO Alexis von Hoensbroech on Thursday, June 16.
As WestJet refocus on enhancing its footprint in Western Canada, let us look at two TSX industrial stocks that could benefit from travel demand this summer.
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Onex Corporation (TSX: ONEX)
WestJet will receive 15 Boeing aircrafts this year in line with its commercial strategies. The air carrier is also working on additional narrow-body orders and maintains its commercial operations in the East, mainly via direct connection to the West.
Being the owner of WestJet, Onex could also see an impact as the airline shifts most of its fleet to Western Canada and plans to expand its air services to Canadians.
Onex generated a net profit of US$ 164 million in Q1 FY2022 compared to US$ 415 million in the first three months of 2021. However, the investment firm recorded a positive change in its distributable earnings to US$ 25 million in the latest quarter, significantly up from US$ 3 million in loss incurred a year ago.
ONEX stock slipped by over 34 per cent year-to-date (YTD) and appeared to be on a downward trajectory with a Relative Strength Index (RSI) of 26.83 on June 16, according to information taken from EODHD/Others. However, growth efforts taken by WestJet could provide a boost to the parent company.
Air Canada (TSX: AC)
Air Canada is hard to ignore when talking about Canadian airlines. The mid-cap airline extended its air network in North America and internationally for this summer in February.
Air Canada saw its stock prices contract by nearly 22 per cent in 2022. AC's RSI value was around 23.61 on June 16, below the oversold market of 30, as per EODHD/Others data.
Bottomline
First, the COVID setbacks, and now, rising fuel costs, inflation, recession fear etc., economic factors continue to affect the airline industry.
Despite these challenges, these two Canadian air carriers are focused on maintaining and expanding their operations to expedite pandemic recovery. Hence, when the economy rebounds, these stocks may fetch substantial gains as they are currently available at low prices.
Also read: CM and TD: 2 TSX financial stocks to tackle rate hike fear
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.
