Air Canada (TSX:AC) shares soared 12% to close at $30.61 on Wednesday, hitting a new 52-week high after the company announced the sale of a 25% stake in its Aeroplan loyalty program. The stock is up 60% this year, marking a massive turnaround for the airline as it rebounds to price levels not seen since early 2020.
The $2.5 billion transaction involves private equity giant Blackstone alongside three Canadian pension funds, including the Caisse de dépôt et placement du Québec. Despite selling a quarter of the program, Air Canada will retain full operational control. Outgoing CEO Michael Rousseau reassured frequent flyers that the deal will bring no changes to how members earn or redeem points.
This windfall provides a much-needed financial cushion as the airline battles severe headwinds. Chief Financial Officer John Di Bert noted that surging jet fuel prices, driven by conflict in the Middle East, have resulted in a staggering half-billion-dollar hit to the company’s 2026 earnings. Because about half of spring tickets were booked before the spike, the airline couldn't recover costs through higher fares. Consequently, Air Canada reported a recent net loss of $178 million, even as revenues climbed 11% to $6.27 billion.
Looking ahead, Air Canada plans to leverage the proceeds to strengthen its balance sheet, dedicating $1.7 billion to repay bonds and up to $800 million for share buybacks in September.
Although the company lowered its adjusted earnings forecast for the year to between $2.9 billion and $3.2 billion, corporate and premium travel demand remains highly resilient as new leadership prepares to take the helm. Whether this already hot stock can soar higher, however, is questionable.
