Air Canada suspends its forecasts for 2019

Air Canada suspend ses prévisions pour 2019

Photo: Darryl Dyck, The canadian Press
The flight ban affecting the Boeing 737 MAX costs each day 2.7 million to Air Canada.

The flight ban that has hit the Boeing 737 MAX force Air Canada to suspend its financial guidance for the first quarter, the same as for the year 2019 to complete.

The carrier based in Montreal, which has 24 of these new aircraft in its fleet, said Friday that “current uncertainty” has the effect of throwing a shadow on the prospects that it recently published for investors.

“Air Canada suspends all financial projections provided by it on February 15, 2019 and February 28, 2019 with respect to the year 2019,” said the company, whose main fleet consists of 190 aircraft (excluding the regional subsidiaries and Red).

The company, which has nailed its planes on the ground Wednesday, according to the guidelines of Transport Canada and the Federal Aviation Administration of the United States, will provide updates when the situation warrants.

During the presentation of its prospects to 2019, on the 28th of February, Air Canada provided, inter alia, that for the period 2019-2021, the percentage of the earnings before interest, taxes, depreciation, and other items relative to its operating revenue would be from 19% to 22 %. The carrier said Friday that its forecasts for 2020 and 2021 are still valid.

Letter to employees

This announcement follows the letter of its president, Calin Rovinescu, has written to employees Thursday, and the content of which has been fanned by Radio-Canada. “Although we have no way of knowing what the final result will be, or how long these devices will be nailed to the ground, for the moment, we cancel all flights in our fleet of Boeing 737 MAX for the next three weeks,” said the big boss.

“We will continue to modify our plan and will continue to be in contact with you, as well as with our customers,” said Mr. Rovinescu.

On its website, Air Canada says that ” we operate about 75 flights of 737 MAX Boeing each day, a total of approximately 1600 daily flights planned at the network level, which represents less than six percent of the total number of flights “. In addition to the 190 aircraft in its main fleet, the carrier operates 149 aircraft at its regional subsidiaries, and 53 aircraft to destinations served by Air Canada Rouge.

The flights based on the use of the 737 MAX carrying between 9000 and 12 000 people per day, said Air Canada on Wednesday in reaction to the announcement of the minister of Transport, Marc Garneau.

According to an analyst firm Raymond James quoted by various media, the ban cost each day 2.7 million to Air Canada, and approximately 1 million to WestJet. The carrier based in Western canada has 13 of these devices. The only other carrier in canada to have purchased and received the Boeing MAX is Sunwing, which has four.

The carriers affected are indicated Wednesday that they would try to reroute passengers as quickly as possible, Air Canada, stating, however, that the volume of calls planned in the service centers would be important, and that customers would have to have the patience to talk to someone.

On the Toronto stock Exchange, Air Canada has finished the session Friday at 31,66 $, down 0.7 %. That WestJet declined by 0.6 %, to $19.64.