Weekly "Focus" and Turbulence in the Skies

I hope you haven’t been affected by the recent strike at Air Canada by their flight attendants. Thankfully, the strike looks to have been settled but what a major disruption to travellers who had to scramble to find alternative travel arrangements. Canadians like to complain about the cost of domestic air travel due to limited competition but somewhat surprisingly, when it comes to international travel, prices in Canada compare favourably to the cost of flying from the US.

 

Roundtrip Economy for travel October 4 -11
Destination	Departure City - Airline	Airfare (C$)
London	Toronto – Air Canada	$832
	New York – British Airways	$713
Paris	Montreal – Air Canada	$767
	Boston – Air France	$889
Tokyo	Vancouver – Air Canada	$1,690
	San Francisco - United	$1,645

Source: Travelocity.com

 

Airline stocks have always been a challenging investment due to many factors – weather, fuel costs and labour disruptions and this year are once again underperforming the broader stock market indices. Famous investor Warren Buffett has long been critical of investing in airlines with his main point being that despite being transformative for society, airlines often destroyed capital due to high fixed costs, fierce competition, and poor profitability.

 

	Return in 2025	Dividend Yield
Air Canada* (AC)	-12.9%	0.0%
American Airlines (AAL)	-24.2%	0.0%
Delta (DAL)	+0.9%	1.2%
United Airlines (UAL)	+5.2%	0.0%

Sources: FactSet, Values as of August 19, 2025

 

This week’s "Focus" from our economics team is attached.

 

Have a great weekend,

 

Brad

Senior Portfolio Manager and Senior Investment Advisor