Canadians are traveling a lot less these days. That is particularly true for Canadians heading into the United States. And Canadian airline Air Canada (TSE:AC) is modifying its flight schedules accordingly. Adjusting to this new reality did not sit well with investors, who sent shares down fractionally in Friday morning’s trading.
Canadians flying back from the United States are in decline, with numbers hitting 719,500 in March. That is still pretty good, but undeniably down; in fact, that number dropped 13.5% against March 2024. And the numbers from February, a report noted, showed a similar drop. These numbers are prompting airlines, like Air Canada, to reconsider their flight routes—at least for now—and look to adding other destinations that are not quite so contentious right now.
Already, Air Canada has added non-stop service from Montreal to Edinburgh, as well as Athens, Paris and Rome. Meanwhile, flights to American destinations will see smaller planes servicing those routes, or outright removal from the schedule, in accordance with customer demand.
A Growing Fear
The biggest reason for the decline in Canadian / United States travel? Fear, reports noted. Some are growing concerned about increased border scrutiny, with some apparently believing that something as simple as remarks on social media “…that the current regime might find critical of them…” could be a factor in increased border hassle. While there is no evidence that the Trump administration is engaging in hassling everyone who had an unkind word for it on Instagram, some are not taking that chance.
But it was not social media paranoia alone; exchange rates between the Loonie and the U.S dollar are also hampering travel plans, as well as general economic concerns. Reports of some potential United States entrants ending up in detention for a week or more is also not helping vacation plans any; a Welsh backpacker, two German tourists, and one Canadian all reported extended detention periods, reports noted.
Is Air Canada Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on TSE:AC stock based on six Buys, two Holds and two Sells assigned in the past three months, as indicated by the graphic below. After a 28.59% loss in its share price over the past year, the average TSE:AC price target of C$22.45 per share implies 70.17% upside potential.
