01:11 PM EDT, 06/24/2025 (MT Newswires) -- Canadian CPI data for May was released Tuesday morning and the air transportation component decreased year-over-year for the eleventh straight month, notes National Bank.

However, Transat noted when reporting its fiscal second-quarter results earlier in June that for the summer (with capacity heavily weighted to trans-Atlantic routes), its load factors are running 1.2 pts below the same period last year, but yields are 1.7% above last year. Transat management also flagged some softness looking into the latter part of the summer as customers are waiting longer to book given the economic uncertainty.

However, as highlighted in National Bank's recent update of the Canada-Europe market for summer 2025, industry capacity growth is still up just 3.2% y/y (versus a 2.2% increase expected previously). "While our most recent fare survey for several key trans-Atlantic markets in the peak travel period showed average fares overall relatively mixed, we still expect yields this summer on key Atlantic routes to be up slightly y/y," writes analyst Cameron Doerksen.

Air Canada ( ACDVF ) is rated Outperform, with a $24 target.

Air Transat is rated Underperform, with a $2.25 target.

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