What happens when a major airline goes on strike?

When a major airline like Air Canada goes on strike, it creates immediate disruption in the travel market. Flights get cancelled, passengers need alternative options, and competing airlines often see increased demand. This can lead to higher ticket prices and better load factors for rival carriers, potentially boosting their short-term revenue and profitability.

How do airline strikes affect stock prices?

Airline strikes typically hurt the striking airline's stock price due to lost revenue and operational costs. However, competing airlines may see their stock prices rise as investors anticipate they'll capture displaced passengers and potentially charge higher fares due to reduced market capacity.

What does 'load factor' mean in the airline industry?

Load factor is the percentage of available seats that are filled with passengers on a flight. A higher load factor means more seats are occupied, which generally leads to better revenue per flight. When a competitor goes offline, remaining airlines often see their load factors increase as more passengers book with them.

Is this a short-term or long-term investment opportunity?

This is primarily a short-term, event-driven opportunity. Airline strikes typically resolve within days or weeks, so the competitive advantage for rival airlines is usually temporary. Investors in this theme are looking to capitalise on immediate market disruptions rather than long-term industry trends.

What are cross-border routes and why do they matter?

Cross-border routes are flights between different countries, such as between Canada and the US. These routes are often more profitable than domestic flights and have fewer alternative transport options. When Air Canada's cross-border capacity is reduced, US airlines with similar routes can potentially capture this valuable traffic.

15 handpicked stocks

North American Airspace: Rivals Rise Amidst Canadian Strike

A labor dispute between Air Canada and its flight attendants' union has led to a strike, grounding Canada's largest airline. This creates a significant opportunity for competing airlines to capture market share and benefit from increased passenger demand.

Han Tan | Market Analyst

Published on August 16

Top Picks from This Group

Here are a few of the assets in this group. Create an account to unlock the full list.

United Continental Holdings, Inc.

UAL

Current price

$96.50

Delta Air Lines Inc.

DAL

Current price

$56.75

Southwest Airlines Co.

LUV

Current price

$31.91

JetBlue Airways Corporation

JBLU

Current price

$4.92

Sun Country Airlines Holdings, Inc.

SNCY

Current price

$11.81

SkyWest Inc

SKYW

Current price

$100.62

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12 Month Growth Potential

Use the growth calculator to see how much investing in these assets could return over one year, based on aggregated analyst sentiment provided by Refinitive Ltd.

If you invested across these assets:

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In 12 months it might be worth:

$1,000.00

+27.03%

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About This Group of Stocks

Our Expert Thinking

When a major airline goes offline, it creates an immediate market opportunity. Air Canada's strike has removed significant flight capacity from North America, leaving thousands of passengers seeking alternative travel options. This disruption presents a tactical investment opportunity for airlines positioned to capture this displaced demand.

What You Need to Know

This is an event-driven, short-term play focused on the airline industry's competitive dynamics. The strike affects Canada's largest carrier during peak travel season, creating potential for higher ticket prices and increased load factors for competing airlines. This theme targets companies with overlapping routes and capacity to absorb displaced passengers.

Why These Stocks

These airlines and related transport companies were handpicked by professional analysts for their ability to directly benefit from Air Canada's operational shutdown. The selection includes major US carriers, regional operators, and transport companies positioned to capture market share and revenue from this sudden surge in demand.

Group Performance Snapshot

27.03%

Average 12 Month Profit

On average, analysts expect assets in this group to grow 27.03% over the next year.

12 of 14

Stocks Rated Buy by Analysts

12 of 14 assets in this group are rated Buy by professional analysts.

Source: Analyst sentiment is provided by Refinitiv Ltd, a global leader in financial market data with over 40k business clients. Refinitiv Ltd is an independent third party to Nemo. This is not advice.

Why You'll Want to Watch These Stocks

✈️

Strike Creates Instant Opportunity

Air Canada's grounding during peak travel season means thousands of passengers need alternative flights. Rival airlines are perfectly positioned to capture this sudden surge in demand and potentially charge premium prices.

📈

Revenue Boost Potential

When a major competitor goes offline, remaining airlines often see immediate benefits through higher load factors and ticket prices. This disruption could translate directly into stronger quarterly results for these carriers.

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Tactical Market Play

This isn't just about airlines - it's about recognising when market disruptions create short-term profit opportunities. Professional investors are watching these stocks for signs of immediate market share gains.

Get the full story on this Basket. Read our detailed article on its risks and potential.

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