Air Canada suspends financial forecast after shutdown of Boeing 737 Max

Air Canada became the first major airline in the world to suspend its financial forecast following the stranded Boeing 737 Max crash after two fatalities.

The company announced on Friday that it would suspend the financial forecast for the year 2019 and the first quarter financial forecast following the decision by Canada and the United States to join the regulatory authorities. from around the world to ground or ban access to their airspace.

The grounding is expected to last at least several weeks, as investigators are looking for the origin of the ET302 flight of Ethiopian Airlines, which claimed the lives of 157 people on board.

The largest carrier in Canada is one of the North American airlines most affected by strandings and Boeing's decision to suspend aircraft delivery accordingly. It normally operates 24 Boeing 737 Max out of a total of 392.

Air Canada had predicted last month that the adjusted cost per seat available for the year 2019 would increase by 2 to 3% over last year, which is a closely monitored indicator, but the costs will likely be affected by the crushing of the extra amount of fuel. Max-efficient aircraft, badysts said.

In a statement, Air Canada said "continue to adapt an emergency plan to cope with the changing situation." The financial guidelines for next year and the following year remain in place, he said.

Air Canada shares lost 1.5% early in the session.

advisable

"The 737 Max aircraft is an integral part of Air Canada's cross-border and transcontinental expansion strategy in the Atlantic," said Danny Goode, an airline badyst with Morningstar.

The airline is likely to slow down planned retirements of older aircraft in 2019 if strandings last for several months, Goode said. As a result, the carrier will not benefit from lower seat fuel consumption and longer battery life than the 737 Max can deliver.

Analysts said strandings were coming at a bad time for air travel in North America. "The moment of stranding is in the middle of spring break for many people and just before the busy Easter season," said Helene Becker, an airline badyst at Cowen Research. But, she added, "The airlines are quite resilient and we expect them to adapt to meet the demand. For example, to the extent possible, an airline could replace two flights operated with Max aircraft by another operated by a larger aircraft. "