But who the hell thinks it's a good idea to invest in airlines and cruises right now?!?
Warren Buffett once said that as an investor, it is wise to be “Fearful when others are greedy and greedy when others are fearful.”
At least in the US market huge profits have been made by investors who "bought on the dip" in March and rode stocks to near all-time highs again last week until there was some minor profit taking.
With just a small investment I bought Air Canada on a dip and am now at a slight profit. I am rooting for them since they had the only non-stop from Phoenix to Toronto, although often at a somewhat higher fare than American with one-stop.
Most US airlines have surged in value since the March swoon. American Airlines is up about 70% in just the last 16 trading days even after the drop last Thursday.
While business and international travel will be slow to rebound there is lots of pent up demand for domestic leisure travel as the shutdown is lifted even if flights can not be packed but enough to be profitable again.
Air Canada is rapidly cutting costs by planning to lay off half of its workforce, expects domestic travel to rebound later this year, has a very strong balance sheet before COVID-19, and raised another $1.6 billion ($575.6m in equity at CDN 16.25 plus $1.02 billion of convertible unsecured notes due in 2025 at 4% interest).
On layoffs:
"We are doing this in order to conserve cash, right-size our business for the level of traffic we anticipate in the mid- to longer-term and to position ourselves to rebuild once business returns," the company said in a statement.
Analyst average 12-month price target is $25.60 per share vs. June 12th price of $19.40 on the TSX. That compares to its 52 week range from $9.26 to $52.71.
It’s going to take time for the recovery story to play out, though. However, even if Air Canada stock doesn’t get back to its previous high in three to five years, there’s still a good chance that it could double investors’ money from current levels and trade at roughly $40 per share is the latest analyst thinking.
While its potential upward flight will no doubt experience turbulence.
Other potentially positive news:
MONTREAL, May 27,?2020 /CNW Telbec/ - Air?Canada's freight division, Air Canada Cargo has announced an exciting new expansion of its cargo-only network with the addition of five new destinations in Europe and South America beginning June 1 .Air Canada Cargo has operated more than 1,200 cargo-only flights since the end of March.
I had travel vouchers from my April canceled trip to Toronto extended from good for just one year to forever and :
MONTREAL, May 22, 2020 /CNW Telbec/ - Air?Canada is offering customers a choice of nearly 100 destinations in Canada, the U.S. and around the world with an abridged schedule this summer. To ensure customers can book with confidence, the airline has implemented the Air Canada CleanCare+ biosecurity program and is introducing new cancellation options retroactive to March 1, 2020, to give customers greater flexibility and choice should their travel plans change for any reason.
Air Canada is the only international network carrier in North America to receive a Four-Star ranking according to independent U.K. research firm Skytrax, which also named Air Canada the 2019 Best Airline in North America.