10:14 AM EDT, 09/09/2024 (MT Newswires) -- Air Canada ( ACDVF ) said Monday that it is finalizing contingency plans to suspend most of its operations. In a statement it said talks between the company and the Air Line Pilots Association (ALPA), representing more than 5,200 pilots at Air Canada ( ACDVF ) and Air Canada Rouge, continue, but the parties remain "far apart". Unless an agreement is reached, beginning on September 15, 2024, either party may issue a 72-hour strike or lock out notice, which would trigger the carrier's three-day wind down plan, it added.

According to Air Canada ( ACDVF ), talks with ALPA are nearing an impasse over the union's "excessive" wage demands. The airline said customers are advised to use the airline's goodwill policy to defer imminent travel at no cost.

In reaction, National Bank has maintained an Outperform rating and Target of C$24, but it expects some share price volatility in the near-term. The bank keeps its rating and target on Air Canada ( ACDVF ) (based on a 4.0 times EV-EBITDA multiple applied to its 2025 EBITDA forecast), but concedes that the stock "faces a period of volatility in the coming weeks as the risk of a shutdown has grown". With the stock trading at just 2.9 times EV-EBITDA based on its 2024 forecast, the bank believes most of the potential headwinds are already priced in and that the resolution of the pilot negotiations with a reasonable outcome could be a positive catalyst for the stock.

AC was at last look down $0.08 at $15.17.

Price: 15.18, Change: -0.07, Percent Change: -0.49