Air Canada (AC) says it is suspending some flights as the cost of jet fuel hits its highest level in years.
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Specifically, Canada’s flagship carrier said that it is suspending flights departing from Toronto and Montreal to New York’s John F. Kennedy International Airport starting on June 1 until Oct. 25, citing rising jet fuel prices as the reason.
In a written statement, Air Canada said: “As jet fuel prices have doubled since the start of the Iran conflict and some lower profitability routes and flights are no longer economic,” the airline is “making schedule adjustments accordingly.”
Some Relief from High Prices
While jet fuel prices have increased sharply after Iran almost completely blocked the Strait of Hormuz to ships carrying oil and natural gas, Air Canada should get some relief as the waterway is now reopened and crude prices are falling sharply and back below $90 a barrel.
Air Canada said it plans to continue flying to nearby LaGuardia Airport, which is the site where one of the company’s airplanes crashed on March 22. Air Canada’s flights to JFK airport are not intended to serve the local market, but rather to provide connections to other carriers and destinations, according to the airline.
Is AC Stock a Buy?
Air Canada’s stock has a consensus Moderate Buy rating among 12 analysts. That rating is based on six Buy and six Hold recommendations issued in the last three months. The average AC price target of C$23.76 implies 28.73% upside from current levels.
