RBC Capital Markets released its Q1/26 Flight Deck report, authored by analyst James McGarragle, delivering updated forecasts and price targets for Canadian aerospace and aviation companies. The report highlights solid consumer travel trends but stresses that sustained elevated jet fuel costs represent a material short-term risk to industry performance in 2026.
Sector overview
McGarragle’s note describes consumer travel demand as robust, with travel indexes reaching highs that point to strong passenger activity. Despite that tailwind, the analyst warns that high fuel prices could dampen near-term results for carriers and related suppliers unless costs are recovered through pricing or other measures.
Company-by-company outlook
Air Canada (TSX:AC) retains an Outperform rating from RBC, but the firm trimmed its price target to $22 from $25. The analyst lowered EBITDA estimates to levels beneath management guidance and expects the carrier to implement fare increases in Q2 to help offset higher fuel expenditures.
Bombardier Inc (TSX:BBDb) remains a high-conviction pick with an Outperform rating and an increased price target of $298, up from $287. McGarragle noted that business jet activity was a bright spot in the quarter and that Bombardier’s bizjet segment appears relatively insulated from supply chain pressures.
CAE Inc. (TSX:CAE) stays at a Sector Perform rating while its price target was reduced to $42 from $46 to reflect delivery-related headwinds. The analyst cites geopolitical disruptions in the Middle East as adversely affecting near-term demand for CAE’s civil training solutions.
Chorus Aviation Inc (TSX:CHR) is highlighted as RBC’s top idea, carrying an Outperform rating and a price target left unchanged at $35. McGarragle emphasized Chorus as a compelling value opportunity and noted management’s target of $525 million in free cash flow through 2029 as a central part of the investment case.
Exchange Income Corporation (TSX:EIF) completes the coverage with an Outperform rating and a maintained $133 price target. The report points to potential upside in the company’s manufacturing segment, with defense-aligned capabilities identified as a driver for expected double-digit growth.
Analyst view and concluding note
Across the covered names, RBC’s revisions are mixed: some price targets were raised, some lowered, and several ratings were maintained. McGarragle remains constructive on the sector’s long-term fundamentals, arguing that strong consumer travel demand should support results as the industry navigates what the firm describes as a transitory 2026.
This update balances optimism around demand with caution about cost pressures and geopolitical disruptions, laying out a near-term landscape in which pricing actions, delivery schedules, and market segmentation will influence company-level outcomes.