Air Canada Pilots Terminate Decade-Long Contract Framework, Paving the Way for Full Bargaining this Summer

National Bank Financial Maintained the $32 target on Air Canada (AC:TSX)

Air Canada Stock Forecast:

According to 15 analysts, the average target price for Air Canada‘s stock over the next 12 months is CAD 27.09. The average analyst rating for Air Canada is “Buy.” However, Stock Target Advisor‘s own analysis of the stock suggests a “Neutral” rating, based on 5 positive signals and 6 negative signals. As of the last closing, Air Canada’s stock price was CAD 21.87. Over the past week, the stock price has increased by +0.28%, over the past month it has increased by +15.35%, but over the last year, it has decreased by -1.71%.

Air Canada News:

Air Canada pilots have taken a significant step towards achieving improved working conditions and narrowing the earnings gap with their counterparts at U.S. carriers. After a decade-long contract framework, the pilots’ union has successfully ended the previous agreement, opening the door to full bargaining this summer. This development, reported in a note to members seen by Reuters, marks a positive shift in negotiations between Air Canada and its pilots.

The pilots’ union has long been vocal about the need for “historic” gains to bring their earnings in line with those of higher-paid aviators at U.S. airlines. Their counterparts at WestJet Airlines, which is owned by Onex, recently reached a tentative agreement that includes a substantial hourly raise of 24% over four years, along with other improved pay and benefits. This successful negotiation has undoubtedly played a role in encouraging Air Canada pilots to press for similar gains.

To secure the opportunity for negotiations this year, the union had a Monday deadline to exercise a type of escape clause. The agreement that has now been reached will remain in effect until September 29, 2023, with provisions that extend beyond that date. In their letter to members, the union leadership expressed their willingness to engage in discussions with the company if Air Canada provided a substantial proposal that aligned with the pilots’ goals. However, the airline did not seek to open negotiations, prompting the pilots to take action to end the previous contract framework.

This development represents a significant milestone for Air Canada pilots, who are determined to achieve improved compensation and working conditions. By ending the long-standing contract framework, the pilots’ union has paved the way for full bargaining this summer. The negotiations will provide an opportunity for the pilots to advocate for their members’ interests and strive for a fair agreement that bridges the earnings gap with their U.S. counterparts. As the discussions unfold, both the pilots and Air Canada will undoubtedly be working towards a mutually beneficial resolution that supports the long-term success of the airline and the satisfaction of its pilots.

Recent Analysts Coverage Changes:

  • STA Research maintained a “Speculative Buy” for Air Canada and raise the target to $25 from $22 on May 29, 2023.
  • Citigroup maintained a “Buy” rating for Air Canada and raised their target price to $26 from$25 on May 19, 2023.
  • Raymond James raised their target price to $28 from $23 on May 17, 2023.

AC:CA Ratings by Stock Target Advisor

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