Stifel Canada on February Air Transportation Data, Implications For Air Canada

12:51 PM EDT, 03/17/2026 (MT Newswires) -- Canadian CPI data released Monday showed a -0.6% year over year drop in the February air transportation component, continuing the trend of 20 consecutive months of y/y declines, notes Stifel Canada.

Monthly fuel prices were also flat in February, but have experienced a parabolic spike entering March with the war in Iran. Airfares have begun to re-set higher, and analyst Daryl Young expects to see the impact in the March CPI release (in terms of potential for demand destruction and traffic impacts).

Based on preliminary CATSA data, the volume of screened traffic (passenger and non-passenger) through Canadian airports was up +0.7% y/y in February, a slowdown from +5.0% growth in January. Based on Cirium data, first-quarter scheduled seat capacity is +1.8%.

In Young's view, Air Canada (ACDVF) is attractively valued for an airline that has "a unique GDP+ growth opportunity, underpinned by favorable demographic/immigration trends in Canada, a peer-leading global network, and a strong balance sheet."

The global aviation industry is also benefitting from a thriving premium segment, millennials prioritizing travel experiences over goods and growing appetite for international travel.

"We acknowledge that the Canadian consumer appears increasingly stretched (exacerbated by the weak C$) and the domestic market is seeing intensifying competition from LCCs [low cost carriers], but we think AC is uniquely positioned to navigate as Canada's premier airline and only truly global operator."

Air Canada (ACDVF) is rated buy, with a $28.00 price target.

Price: 17.77, Change: +0.77, Percent Change: +4.53

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