Jul. 11 at 3:15 AM
$AC.TSX
$DAL $UAL
@OnTheBalance @airlineinvestor101 @TradeForex @Nordico @veecee1
Today's results were better than expected. Key points:
1. Original 2026 forecast is reinstated. I believe they will do better.
2. Yield up by 12%. PRASM up by 11%. Load down by 1%.
3. Demand & pricing are strong for Q3 and onwards.
Didn't go into market-level details (67% of DAL revenue is dom; 24% for Air Canada). Using similar assumptions for Air Canada
1. Yield/PRASM up by 12%.
2. Same load is conservative.
3. Oil price forecast by AC @ CAD 1.28 per lit. (22% hedged at CAD 0.69, Remaining jet fuel price avg of CAD 155).
4. 10% increase in labor (new contracts), 5% increase cost of selling tickets.
Above will take EBITDA close to $ 875M. Using 11% PRASM increase, EBITDA will be around
$800-
$850 M. Upper end of AC forecast is
$725 M and one analyst is forecasting $ 675 M.
AC will reinstate original outlook and still be conservative. Q3 will be a turning point as 2026 Q3 will remove 2025 numbers from TTM numbers
