Air Canada and Transat A.T. Ratings Confirmed at National Bank Following June CPI Data Release

01:18 PM EDT, 07/15/2025 (MT Newswires) -- National Bank of Canada on Tuesday maintained its outperform rating and $24.00 price target on the shares of Air Canada (ACDVF) , and also maintained its underperform rating and $2.25 price target on the shares of Transat A.T (TRZBF). (TRZ.TO), following the release of the Canadian June consumer price inflation (CPI) data.

The bank noted airfares in Canada were down 9.2% year-over-year in June according to CPI data, and added that fares were up 6.7% sequentially, slightly higher than the 5.7% sequential increase seen in June last year.

"Airfares in Canada through the first half of the year continue to be relatively weak with the June reading declining y/y for the 12th straight month," said the bank.

However, the bank noted Transat, when reporting its fiscal second quarter 2025 results in June, pointed out that for the summer, with capacity heavily weighted to trans-Atlantic routes, its load factors were running 1.2 pts below the same period last year, but yields were 1.7% above last year.

The bank pointed out that Transat did highlight "some softness" looking into the latter part of the summer as customers are waiting longer to book given the economic uncertainty.

The bank further noted that, while trans-Atlantic industry capacity growth this summer looks to be "modest," which should be supportive of yields, domestic capacity in the third quarter is set to increase 7.1% year-over-year as Canadian airlines have shifted capacity from U.S. routes to the domestic market which could put some pressure on airfares.

"However, we note that demand has been solid with domestic passenger traffic in May up 6.2% y/y," added the bank.

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