Air Canada Withdraws Guidance as Flight Attendant Strike Grounds Planes
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The Montreal-based carrier, which typically carries 130,000 people a day within Canada and internationally, has been grounded as a strike by its flight attendants enters a third day. In a statement, Air Canada said it canceled 240 flights on Aug. 17 alone due to the strike, leaving thousands of passengers stranded.
Canada's federal government in Ottawa moved quickly to order the flight attendants back to work and extend the union's previous collective agreement until a resolution to the current conflict is reached. The government also directed the airline and the Canadian Union of Public Employees (CUPE) to enter binding arbitration to determine the outcome of the contentious labor dispute.
Unfortunately, the union has refused to comply with the government's back-to-work order and the flight attendants remain on picket lines throughout Canada.
'Hell No, We Won't Go'
In a news release, representatives of CUPE said they want Air Canada to negotiate a fair deal at the bargaining table rather than rely on the federal government to order an end to the strike, which is now considered an illegal work stoppage.
Along with pulling its guidance, the airline said that it plans to resume flights on Aug. 18, though it didn't provide details on how it would accomplish that feat. Management has said it will likely take between seven and 10 business days for Air Canada's schedule to normalize, if the strike were to end right away, though that appears unlikely.
Is AC Stock a Buy?
Air Canada's stock has a consensus Strong Buy rating among 12 Wall Street analysts. That rating is based on 10 Buy and two Hold recommendations issued in the last three months. The average AC price target of C$25.79 implies 33.20% upside from current levels.
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