Air Canada (AC) has achieved labor peace ahead of the busy summer travel season.
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The Montreal-based carrier, which is Canada’s flagship airline, announced that it has reached a tentative collective agreement with Unifor, the union representing 6,000 employees in its contact centers, customer relations, concierge services, and airport terminal operations.
Air Canada said details of the new agreement will remain confidential until the union undertakes a ratification vote with its members, which is expected to be completed by the end of June. The deal also still requires approval from Air Canada’s Board of Directors.
Air Canada’s income statement. Source: The Fly
Avoiding Past Mistakes at Air Canada
Air Canada is still recovering from a nasty strike it endured last summer. The carrier was forced to cancel more than 700 flights after 10,000 flight attendants walked off the job in August. While the strike only lasted three days, it snarled air traffic and took weeks for the airline to get operations back to normal.
The strike ended after the flight attendants were offered pay increases of more than 30%. The strike last summer and its aftermath have weighed on AC stock, which is now down more than 20% through five years. Management at the airline have said that securing labor peace is a top priority.
Is AC Stock a Buy?
Air Canada’s stock has a consensus Moderate Buy rating among 12 Wall Street analysts. That rating is based on seven Buy and five Hold recommendations issued in the last three months. The average AC price target of C$22.68 implies 12% upside from current levels.
