Flying High or Grounded? Market Valuation of Air Canada through Financial Ratios and Stock Analysis

This paper investigates how Air Canada’s financial ratios and stock performance from 2022 to 2024 reflect investor confidence during the airline’s post-pandemic recovery. It focuses on key metrics such as the price-to-earnings (P/E) ratio, market-to-book ratio, and operating data. While financial performance improved significantly in 2023, valuation metrics in 2024 suggest renewed investor caution, possibly due to fuel cost volatility and international demand weakness. This paper uses comparative analysis with WestJet and incorporates CAPM to assess investor sentiment and valuation accuracy. Additional insights are incorporated through a profitability, liquidity, and solvency analysis for the 2020–2023 period to contextualize financial health during Air Canada’s recovery.

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Publication Details

Journal
Highlights in Business Economics and Management
Published
2025-09-04
DOI
https://doi.org/10.54097/8ty7s286
Primary Topic
Aviation Industry Analysis and Trends
Type
article
Field-Weighted Citation Impact
0.00
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article

Flying High or Grounded? Market Valuation of Air Canada through Financial Ratios and Stock Analysis

Wayne Yu
Highlights in Business Economics and Management
Aviation Industry Analysis and Trends
article

Flying High or Grounded? Market Valuation of Air Canada through Financial Ratios and Stock Analysis

Wayne Yu
article en

Abstract

This paper investigates how Air Canada’s financial ratios and stock performance from 2022 to 2024 reflect investor confidence during the airline’s post-pandemic recovery. It focuses on key metrics such as the price-to-earnings (P/E) ratio, market-to-book ratio, and operating data. While financial performance improved significantly in 2023, valuation metrics in 2024 suggest renewed investor caution, possibly due to fuel cost volatility and international demand weakness. This paper uses comparative analysis with WestJet and incorporates CAPM to assess investor sentiment and valuation accuracy. Additional insights are incorporated through a profitability, liquidity, and solvency analysis for the 2020–2023 period to contextualize financial health during Air Canada’s recovery.

Highlights in Business Economics and ManagementVol. 62
Brock University (CA)
Openalex Percentile: Top 54%
Aviation Industry Analysis and Trends
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