Air Canada (TSX:AC) Stock: 3 Game-Changing Moves

Most of us at Motley Fool are closely watching Air Canada stock. Rapid testing at airports is one game changer that is improving its risk/reward tradeoff.

| More on:
Aircraft wing plane

Image source: Getty Images

Air Canada (TSX:AC) stock has been crushed this year. All the while, many of us at Motley Fool Canada have been warning investors. The risk in Air Canada stock was too big. It has become a very unfortunate tale of collateral damage in the coronavirus pandemic crisis.  In fact, the whole travel industry has shared its fate. Not too long ago, this was an industry that was thriving. The global economy was thriving and standards of living were rising

The pandemic has changed all of this, at least temporarily. The million-dollar question is simple. How long will it take to recover from this hit? Air Canada is fighting hard to change the narrative. Air Canada is benefitting from game-changing moves today that will eventually move the needle. Here are three of those moves.

Air Canada applauds rapid-testing approvals

The federal government and the province of Alberta have embraced rapid testing of travelers. This pilot project will test international and transborder travelers arriving in Alberta. There’s currently a 14-day quarantine in effect for returning travelers. Travelers who test negative upon entry will forgo the 14-day quarantine requirement if they retest negative one week later. This is key in the fight to have travel resume in a safe and controlled manner.

It appears more and more obvious that we must to learn to live safely with this coronavirus. Steps are being taken, such as rapid testing, to make sure of this. As Alberta premier Jason Kenney has said, “We must move forward to develop policies that facilitate safe travel as a key part of economic recovery.” A good and logical next step would be rapid testing of fliers before they even get on a plane. This would be the total game changer.

With results in as little as 20 minutes, rapid testing is a key component of learning to live with the coronavirus. While the tests are not as accurate as the gold standard tests, they range in the 93% range of accuracy.

Air Canada offers the Infinite Canada Flight Pass

The Infinite Canada Flight Pass gives fliers unprecedented flexibility and certainty when booking flights. For one flat fee, customers will be able to book travel easily and without limitations. They will be able to make changes or cancellations without penalty. And they can fly as often as they want for up to three months.

As people begin to contemplate flying again, this type of flexibility is essential. Air Canada is basically tasked with the job of wooing customers back. They will need to be convinced. And they will need to be confident that they are safe.

Air Canada: Government assistance is coming

Obviously, the airline industry is pushing for government assistance. According to reports, the federal cabinet is readying a bailout package for the airline industry. Many of us have expected this because the airline industry is essential for the economy. The airliners and the travel industry have been among the hardest hit.

Motley Fool: The bottom line

Little by little, all countries are taking small steps toward the goal of living safely with the coronavirus. I think these “small” steps matter. I think they will build on each other and eventually we will have a safe framework for living with the coronavirus.

Air Canada will report its third-quarter results on November 9. It will be important to see how much the company has reduced its cash burn. Also of great importance is the issue of government support and Air Canada’s progress on implementing safety measures. Here at Motley Fool, most of us are watching closely. The risk in Air Canada stock will subside. There will be a time when the return potential will outweigh the risk.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Karen Thomas has no position in any of the stocks mentioned.

More on Coronavirus

rail train
Coronavirus

Bull or Bear: Why Analysts Changed Their Tune on Aecon Stock

Analysts had been champing at the bit for the construction company, but the tides have turned.

Read more »

Biotech stocks
Coronavirus

Is Bellus Health Stock Still a Buy After 30% Earnings Jump?

The biotech continues to make progress on obtaining FDA approval for its chronic-cough therapy.

Read more »

grow dividends
Coronavirus

Goodfood Stock Likely to Double in 2022!

Goodfood (TSX:FOOD) stock has had a huge rise and fall in the last few years. But at $1.85 a share,…

Read more »

grow dividends
Coronavirus

Canfor Stock Pops 5% as Sales Climb 15% YOY

Canfor (TSX:CFP) stock remained positive about its future in the global lumber market after profits climb 15% year over year.

Read more »

edit Safety First illustration
Coronavirus

2 Crash-Proof TSX Stocks I’d Buy With $5,000

These two TSX stocks have proven they can handle this economic downturn and likely will continue to be safe far…

Read more »

TSX Today
Coronavirus

What to Watch on the TSX on Tuesday, April 26

Earnings continue to come out on the TSX today, including Air Canada (TSX:AC). Meanwhile, investors may want to continue watching…

Read more »

think thought consider
Coronavirus

Should Investors Buy Goodfood Stock Ahead of Earnings?

Goodfood (TSX:FOOD) stock dropped on Wednesday ahead of the company's earnings release. And it's unclear whether there will be anything…

Read more »

little girl in pilot costume playing and dreaming of flying over the sky
Coronavirus

Cargojet Stock Soars Higher, Is it Still a Buy?

Cargojet stock (TSX:CJT) jumped after its deal with DHL, but at today's prices is the airline company still a buy…

Read more »