Canadian airline stocks were hit hard in 2020 and 2021 due to the Covid-19 global pandemic and government mandated lockdowns.
There were very few sectors that were hit harder than the Canadian airline industry. This fostered significant demand destruction, impacting the airline travel business as a whole.
When you think of cyclical stocks, airline stocks are certainly the first ones to come to mind. This means that their business is directly tied to the strength and or weakness of the economy.
While investing in airline stocks might seem like a great idea, it is certainly risky and not for everyone.
Now that the economy is open and inflation is continuing albeit, demand for travel is likely to increase. This could bode well for airline stocks.
Below, we will present the 5 Best Canadian Airline Stocks to watch in 2023!
Best Canadian Airline Stocks for 2023
1. Air Canada (TSE: AC.TO)
- Ticker: AC.TO
- Dividend Yield: N/A
- Market Cap: $6.75 Billion
Air Canada is a Canadian airline company headquartered in Montreal, Quebec, Canada.
They are Canada’s largest airline by size and passengers carried.
During the pandemic, Air Canada faced significant pressures as their business largely came to a screeching halt.
Now with the company trying to return back to pre-pandemic levels, it may be in for a difficult road ahead.
However, their recent fourth quarter 2022 financial results did show some promise. Q4 passenger revenues of $4.062 billion up almost double from the year prior.
They were also able to turn a profit, with $168 million in net income, compared to a net loss of $493 million in Q4 2021.
As demand continues to rise for travel with summer around the corner, Air Canada should be a top Canadian airline stock to watch in 2023.
2. Onex Corporation (TSE: ONEX)
- Ticker: ONEX
- Dividend Yield: 0.65%
- Market Cap: $5.02 Billion
Onex Corporation is a Canadian investment management and holding company headquartered in Toronto, Ontario, Canada.
So you might be wondering, why Onex Corporation? Well, Onex Corporation owns Westjet, one of Canada’s largest airlines.
Westjet is currently Canada’s second-largest airline, carrying more that 65,000 passengers per day.
Onex Corporation currently has more than $48 billion in assets under management (AUM).
With a dividend yield of 0.65% and strong operating margins, Onex is a top Canadian airline stock to keep on your radar.
3. Cargojet (TSE: CJT.TO)
- Ticker: CJT
- Dividend Yield: 1.05%
- Market Cap: $1.85 Billion
Cargojet is a Canadian cargo airline company headquartered in Mississauga, Ontario, Canada.
The company’s operations are primarily based out of John C. Munro Hamilton International Airport.
They a fleet of 38 boeing ’all cargo’ aircrafts for local and international routes. It is rated as Canada’s most reliable cargo airline carrier.
Cargojet all service fleet deliver 25 million pounds of cargo each week, operating 24 hours a day, 7 days a week.
The company employs more than 2,200 people, and has approximately $1.46 Billion in total assets.
In 2022, the company had annual revenues of $979.90 Million.
With a dividend yield of 1.05%, Cargojet is one of the best Canadian airline stocks to buy in 2023.
4. Chorus Aviation (TSE: CHR.TO)
- Ticker: CHR
- Dividend Yield: N/A
- Market Cap: $611 Million
Chorus Aviation is a Canadian regional airline company headquartered in Halifax, Nova Scotia, Canada.
The company operates two businesses, aircraft leasing and asset management services.
Its two businesses are Falko, its International Aircraft Asset Management firm and Voyageur, its aircraft leasing business.
Chorus Aviation announced record financial results in 2022, with operating revenues up nearly 27% year-over-year. The company also saw robust free cash flow of $371.3 million.
The company employs more than 4,500 people, and has approximately $4.05 Billion in total assets.
In 2022, the company had annual revenues of $439.75 Million.
As the company closed the acquisition of Falko in 2022, they could be ripe for more acquisitions in the near future.
5. Transat A.T. (TSE: TRZ.TO)
- Ticker: TRZ
- Dividend Yield: N/A
- Market Cap: $121 Million
Transat A.T. is a Canadian vertically integrated airline company headquartered in Montreal Quebec, Canada.
The company operates as an airline experience company based offering discount deals to 76 destinations in 25 countries.
However, they also operate Transat A.T., a fleet of 31 aircraft carriers. The aircraft fleet are primarily Airbus A321-200, Airbus A321-LR, and Airbus A330-200.
The company employs more than 1,700 people, and has approximately $1.03 Billion in total assets.
In 2022, the company had annual revenues of $1.64 Billion.
With travel demand picking up, Canadians continue to search for potential upside in beaten down airline companies.
Nonetheless, Transat A.T. is a highly cyclical business and the company may never return back to pre-pandemic levels.
Canada Airline Stocks: Does The Future Look Bright?
Canadian airline stocks were among the hardest hit sectors during the covid-19 pandemic.
This led to some airlines requesting government assistance and facing near bankruptcy.
As they often say, only the strong survive and luckily many of these small Canadian airlines are still standing today.
With travel demand is beginning to pick up as we approach the summer, now might be a great time to consider some beaten down Canadian airline stocks.
But it’s important to understand that this business is cyclical in nature, so investors should prepare for volatility and only invest what they can afford to lose.
Disclosure: The author holds no position mentioned in this article. Freedom Stocks has a disclosure policy.
