Air Canada (TSX: AC) Stock prices in July continued to fall for the second straight month. Stock prices have fallen nearly 9% in the last two months after recording a strong 10.5% rise in May. Travel restrictions have been relaxed in recent weeks, but growing concerns about new COVID variants appear to have hit investors’ sentiment.
However, I think the recent fall in stock prices has made it even more attractive to long-term investors.This is the main reason I believe Air Canada Stock We may hold a big rally in the near future.
Air Canada Increasing Bookings
In July, several US airlines pointed out that travel demand is skyrocketing across North America as travel restrictions and traveler quarantine rules continue to be relaxed. Air Canada’s management confirmed at its most recent quarterly closing event that the pre-booking trend is gradually improving.
Talking about the latest booking trends on July 23, Air Canada CEO Michael Rousseau Said “Overall bookings are below pre-pandemic levels, but customers are back. In June, bookings began to grow significantly.”
I don’t expect travel demand to surge above pre-pandemic levels, but a significant improvement in booking rates is likely to accelerate Air Canada’s financial recovery in the coming quarters.
Preparing for higher demand
Many major North American airlines have recently admitted that they are facing a shortage of staff (including pilots). This issue is a major impediment to their financial recovery and could possibly delay it by several months.
On the positive side, Canada’s largest passenger airlines are already preparing to meet the growing demand. Rousseau confirmed in its second-quarter earnings call that Air Canada was “no problem from a pilot’s point of view.”
And more preparation …
On July 19, Canada’s flag carrier announced its current summer cross-border schedule. As a result, the airline plans to operate up to 220 daily flights on 55 routes between the United States and Canada.
Similarly, Air Canada last week announced two new winter services to two major solar destinations in Florida. The airline also plans to operate more frequent flights to Mexico and the Dominican Republic. These recent developments clearly show that management is actively preparing for the higher demand expected during the next holiday season.
Air Canada Shares May Rise In August
Air Canada shares are currently trading at a 9.7% increase annually, well below the broader market. NS TSX composite index So far, it has risen 16.4% in 2021.
Air Canada’s revenues may show significant improvement in the coming quarters, but may continue to consume cash. Nevertheless, investors tend to focus more on future growth prospects and expectations than on ongoing financial developments.
That’s why I believe that significant improvements in travel demand and Air Canada’s efforts could boost investor confidence and boost stock prices in the coming weeks.
This article represents the opinion of a writer who may disagree with the “official” recommendation position of the Motley Fool Premium Services or Advisors. We are Motley! Asking investment treatises, even our own treatises, can help you think critically about your investment and make decisions to be smarter, happier, and richer. As a result, we may publish articles that may not match recommendations, rankings, or other content. ..
Motley Fool does not have a position in any of the listed stocks. Stupid contributor Jitendra Parashar There are no positions in any of the listed stocks.
Can Air Canada’s (TSX: AC) share price finally skyrocket in August 2021?
https://www.fool.ca/2021/08/03/could-air-canada-tsxac-stock-price-finally-skyrocket-in-august-2021/ Can Air Canada’s (TSX: AC) share price finally skyrocket in August 2021?