Yahoo Finance Air Canada stock jumps after pilots ratify four-year deal
Air Canada (AC.TO) shares jumped more than four per cent in midday trading on Thursday after the company's pilots voted to ratify a new four-year agreement with the airline.
The Air Line Pilots Association (ALPA), the union representing more than 5,200 Air Canada pilots, says 67 per cent of members voted in favour of the deal.
The agreement, reached at the last minute in late-September after more than a year of negotiations, is retroactive to September 2023. There were some concerns about whether the deal would be ratified, as it faced scrutiny from some of its pilots, particularly more recent recruits. The head of the Air Canada pilot union, Charlene Hudy, had said she would step down if members opted to reject the deal.
"This agreement helps restore what Air Canada pilots have lost over the past two decades and creates a strong foundation from which to build on,” Hudy said in a news release on Thursday.
While the impact of the strike threat is expected to weigh on the airline's upcoming third and fourth-quarter results, the new deal removes what analysts say has been "a significant overhang" on Air Canada's stock. TD Cowen analysts wrote in a research note earlier this month that the company is "significantly undervalued" compared to its peers.
In a statement, Air Canada chief executive Michael Rousseau says the agreement "gives our company flexibility and creates a framework for future growth of the airline and its network."
Shares of Air Canada were up 4.5 per cent shortly after noon E.T. on Thursday on the Toronto Stock Exchange.
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.
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