10:28 AM EDT, 06/25/2024 (MT Newswires) -- National Bank said Tuesday that airfares in Canada rose 4.5% year over year in May, and 15.6% versus 2019, according to Canadian CPI data for May.

Among highlights, National noted the year-over-year increase in May follows a flat print in April and a 2.9% year-over-year increase in March, which was the first year-over-year increase since March 2023. Fares were up 2.3% sequentially after declining 5.7% sequentially in April.

The May increase versus 2019, National also noted, was "roughly in line" with the April increase versus 2019 of 15.7% but lower than the March increase of 24%.

"Airfares in Canada have strengthened the last three months following an 11-month stretch of y/y declines (on difficult comparables) and remain well ahead of pre-pandemic levels," the National Bank analysts said.

On Air Canada ( ACDVF ) , National Bank has an "Outperform" rating and a price target of $30. On Transat A.T ( TRZBF )., National Bank has an "Underperform" rating and a price target of $2.25.

During its Q2 results earlier in June, Transat said that it is experiencing some yield softness on trans-Atlantic routes this summer with its summer load factor currently tracking about 2 points lower year over year and yields down 8%.

"Air Canada ( ACDVF ) will also likely see some yield deterioration this summer on its Atlantic routes due to difficult comparisons and higher industry capacity. We note, however, that our own fare surveys for Air Canada ( ACDVF ) suggest that domestic pricing is generally higher y/y on the key routes that we track," the analysts added.

On last look on Tuesday in Canada, Air Canada ( ACDVF ) was down 1.2% while Transat A.T ( TRZBF ). dropped 1.8%.

Price: 16.90, Change: -0.11, Percent Change: -0.65