12:58 PM EDT, 06/25/2025 (MT Newswires) -- Canadian CPI data released this week showed a 10.1% decline in the air transportation component but fuel prices are also down ~20% impacting airfares, notes Stifel Canada's Daryl Young.

Screened passengers through Canadian and U.S. airports has remained largely stable, but Canadian total passengers were up 2.2% in May. A breakdown of geographic travel data has not yet been published for May but Young reports hearing anecdotes of early recovery in U.S. transborder travel.

"We acknowledge that the Canadian consumer remains very stretched and tariff-related price hikes are just starting to percolate through but it does appear that the worst-case tariff outcome has been avoided and the C$ has rebounded, setting the stage for AC shares to claw-back valuation."

Air Canada ( ACDVF ) has a Buy rating and a $23 price target.

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