Air Canada’s (TSE:AC) stock lost altitude on Sept. 8 after its more than 10,000 flight attendants voted to reject the latest contract offer from the Montreal-based carrier.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Flight attendants who are represented by the Canadian Union of Public Employees (CUPE) voted 99% against a proposed wage increase, scuttling hopes that a new contract between Air Canada and the workers could be reached. The rejection comes after months of negotiations between the airline and the flight attendants’ union.
The proposed wage increase was 12% for flight attendants with five years of service or less, and 8% for employees with six or more years of service. The union said in a news release that the flight attendants would still earn less than Canada’s minimum wage with the pay increase that had been proposed.
Another Strike?
CUPE representatives also noted that Air Canada’s flight attendants’ pay has increased by only about 10% over the last 25 years. The flight attendants went on strike Aug. 16, grounding hundreds of flights across Canada and stranding tens of thousands of passengers.
However, Canada’s federal government quickly intervened and ordered the flight attendants back to work. The issue of wages will now be referred to mediation and possibly binding arbitration, removing the risk of another strike at the flagship airline. AC stock has declined 14% this year.
Is AC Stock a Buy?
Air Canada’s stock has a consensus Strong Buy rating among 11 Wall Street analysts. That rating is based on 10 Buy and one Hold recommendations issued in the last three months. The average AC price target of C$26.50 implies 36.97% upside from current levels.
