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The recent freefall taken by Air Canada (OTCPK:AIDIF) shares has presented a good entry point for investors, according to Jacques Kavafian, Research Capital analyst.

While Mr. Kavafian reduced his price target on the stock to C$8.50 a share from C$10, he also raised his rating from a “hold” to a “buy” due to the recent sell off of the stock.

Mr. Kavafian said:

Air Canada has some cost issues to deal with particularly with high fuel prices but the decline in share price is unjustified.  A month ago the shares were at $9.50 and yesterday closed at $4.40. We believe the selling on Air Canada is overdone and thus recommend investors buy the shares for trading purposes especially as we are now in the industry's high season.

He also said the recently announced job and capacity cuts at the airline should benefit Air Canada in the fourth quarter and into 2009.

Source: Research Capital Analyst Sees Buying Opportunity in Air Canada