Air Canada (TSX:AC) turned into one of the most dominant growth stocks on the TSX in the 2010s. It started the decade slow as the Great Recession hit the airline industry hard. Shares of Air Canada would fall below the $1 mark in the early 2010s but would finish out the decade just shy of the $50 price point.
Shares of Air Canada have climbed 20% in 2021 as of close on March 30. The stock has surged nearly 70% in the year-over-year period. Canadian investors had hoped that its prospects would brighten heading into the spring and summer of 2021. Instead, the Canadian government has intensified travel restrictions. Moreover, Ontario may be nearing yet another lockdown. The vaccine rollout has been a disaster, and Canadians are losing patience.
In early March, it looked like Air Canada was nearing a breakthrough in talks with the federal government. Canada’s top airliner has been hungry for a bailout since the start of the COVID-19 pandemic. Air Canada’s customers are also seeking relief. The company has refused to fully refund cancelled flights without a government bailout. On the other hand, the government has reportedly stipulated that no bailout cash will go to executive bonuses.
Unfortunately, bailout talks have seemingly slowed to a crawl as we come to the end of March. This is a troubling development for Air Canada. I’m still very bullish on its long-term prospects, but more pain may be in store as Canada has lagged behind its peers in the fight against COVID-19.
Related Stories
