Air Canada drops most in 11 months on capacity concern

Air Canada tumbled the most in 11 months as concern mounted that a deteriorating economy will hurt profits while the country’s biggest carrier and competitor WestJet add flights and routes. Air Canada fell 9.2% to C$8.10 by the close of trading in Toronto Thursday, its biggest single-day drop since Feb. 11. “There’s a perception that too much capacity is being added into a market where demand may be weakening,” said Cameron Doerksen, a National Bank Financial analyst. Raymond James analyst Ben Cherniavsky downgraded Air Canada to underperform from market perform Thursday. The firm is the only one among 16 surveyed by Bloomberg to give the carrier the equivalent of a sell rating. Citing “the company’s expansionary strategy and heavy” capital-spending plans, Cherniavsky cut his price target to C$7 from C$12. The next lowest target is C$13. While Air Canada hasn’t disclosed 2016 capacity projections, “all signs point to a significant increase,” Doerksen said, citing new long-distance routes and the planned delivery of Boeing Co. 787 Dreamliner aircraft.<br/>