Air Canada (TSX:AC) Valuation Check As New Winter 2026–27 Routes Signal Further International Expansion

Air Canada (TSX:AC) has put its winter 2026–27 schedule in the spotlight, outlining new routes to Quito, restored Calgary sun destinations, and year-round service to Manchester and Copenhagen, alongside previously announced Sapporo flights.

See our latest analysis for Air Canada.

Even with the winter 2026-27 route expansion, including Sapporo and the newly outlined Latin America and Europe services, momentum in Air Canada’s shares has been soft, with a 30 day share price return of 4.65% decline and a 1 year total shareholder return of 3.88% decline, hinting that investors remain cautious about longer term execution and risk.

If this kind of network expansion has your attention, it could be a good moment to look beyond a single airline and scan aerospace and defense stocks for other travel focused opportunities.

With Air Canada shares down over the past year despite route expansion plans, and trading below the average analyst price target and some intrinsic value estimates, you have to ask: is there a mispricing here, or is the market already baking in future growth?

Most Popular Narrative: 22.6% Undervalued

With Air Canada closing at CA$18.85 against a narrative fair value of about CA$24.36, the current gap centers on long haul growth, loyalty economics, and margin assumptions rather than short term headlines.

Fleet modernization and upcoming entry of next-gen fuel-efficient aircraft (A220s, 737 MAX, and A321XLRs) are expected to drive down per-seat costs and enhance operational efficiency, supporting margin expansion and improved long-term earnings.

Read the complete narrative.

Want to see how lower unit costs, recurring loyalty cash flows, and a richer route mix come together in one valuation story? The narrative leans heavily on specific growth, margin, and earnings paths that are far from consensus headlines. Curious which assumptions have to hold for CA$24.36 to stack up against today’s CA$18.85?

Result: Fair Value of CA$24.36 (UNDERVALUED)

Have a read of the narrative in full and understand what’s behind the forecasts.

However, that story runs into real friction from rising labour costs and intense competition on key international routes, both of which could pressure margins and future earnings assumptions.

Find out about the key risks to this Air Canada narrative.

Build Your Own Air Canada Narrative

If you look at the numbers and story differently, or prefer your own research path, you can build a custom view in minutes with Do it your way.

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding Air Canada.

Looking for more investment ideas?

If you are weighing up Air Canada, this is a great moment to widen your search and line up a few fresh ideas that fit your style.

This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focused analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.

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