01:04 PM EDT, 05/20/2025 (MT Newswires) -- National Bank of Canada on Tuesday maintained its ratings and price targets on Air Canada ( ACDVF ) and Transat A.T ( TRZBF ). (TRZ.TO) following the release of Canada's consumer price index data for April.

The bank said airfares in Canada through the first four months of the year continued to be relatively weak with the April reading declining year-over-year for the tenth straight month, but up modestly sequentially. Outperform-rated Air Canada ( ACDVF ) noted when reporting its first-quarter results earlier in May that it was seeing relatively stable bookings and that advanced ticket sales at the end of Q1, were up modestly y-o-y, which would also indicate a stable demand environment overall.

"We also note that despite Canadian airlines shifting capacity from U.S. transborder routes to domestic Canada (and to a lesser degree, the trans-Atlantic), scheduling data from OAG shows Canadian industry system seat capacity in Q2/25 up a modest 3.2% y/y versus up 4.0% scheduled at the end of March," said analyst Cameron Doerksen. Doerksen believes Air Canada ( ACDVF ) has better flexibility to shift capacity than its domestic peers should demand soften, as AC has a broader network.

The bank noted that y-o-y decrease in April follows a 12% y-o-y decline in March and a 4.4% y-o-y decline in Feb. "Fares were up 1.0% sequentially, which is an improvement compared to the 5.7% sequential decline seen in April last year," added Doerksen.

National Bank maintained its price targets on Air Canada ( ACDVF ) at $24.00 and on underperform-rated Transat A.T ( TRZBF ). at $1.50.

Price: 18.74, Change: +0.01, Percent Change: +0.05