Air Canada suspends financial forecast for 2019 after Boeing 737 Max grounded

Analyst Walter Spracklin of RBC Dominion Securities advised investors not to be alarmed

Canada’s largest airline is suspending its financial guidance for this year following the decision by regulators in Canada and the United States to ground the Boeing 737 Max aircraft until further notice.

Air Canada said Friday that, “in light of the current uncertainty,” it is suspending the forecast it provided last month for its 2019 financial year.

The Montreal-based company said its guidance for the years 2020 and 2021 for return on invested capital and margin on earnings before interest, taxes, depreciation and amortization (EBITDA), as well as the cumulative free cash flow over the 2019-2021 period, remains in place.

Analyst Walter Spracklin of RBC Dominion Securities advised investors not to be alarmed.

WATCH: Canada bans Boeing 737 Max 8 plane following fatal Ethiopian crash

“We believe the company has avenues to work around the grounding, including the longer in-service use of older aircraft, possible access to third-party aircraft, the temporary use of different gauge aircraft and if necessary the temporary suspension of some routes,” he wrote in a research note.

Spracklin said the carrier’s suspension “does not come as unexpected and more importantly, we do not consider it to be impacting our longer-term view on the shares.”

Regulators around the world grounded the Boeing 737 Max 8 and Max 9 aircraft over safety concerns arising from the crash of an Ethiopian Airlines flight that killed everyone on board, including 18 Canadians.

Concerns have been raised regarding apparent similarities with a Lion Air flight involving the same aircraft that crashed off the Indonesian coast in October.

Air Canada has 24 Boeing 737 Max 8 aircraft out of 184 narrow-body planes in its fleet.

The Canadian Press

Like us on Facebook and follow us on Twitter.

Just Posted

Award-winning artist Belle Plaine coming to the Dream Cafe

Belle Plaine and the Vultures have multiple shows next week in the Okanagan starting in Penticton.

Penticton United Church welcomes Makers’ Market Nov. 23

From baking, to knitting, to toys and everything in between, get your Christmas shopping done early

Overtime heroics help Vees to 2-1 overtime victory

Vees cracked Chenard late in the overtime frame, with only 15 seconds remaining in extra time

Pecha Kucha returns to Cannery Brewing to Move It on Dec. 5

Speakers for the upcoming show haven’t been announced yet.

Summerland takes the 100 Radon Test Kit Challenge

Take on Radon and the Summerland Healthy Community Initiative are partnering on the campaign.

Teen with cancer whose viral video urged Canadians to vote has died, uncle tweets

Maddison Yetman had been looking forward to voting in her first federal election since junior high school

Rowing Canada, UVic investigate celebrated coach for harassment, abuse

Lily Copeland says she felt intimidated and trapped by Williams

Cleanup in the works after tanker truck fire leads to oil spill in B.C.’s Peace region

The province said the majority of the spilled oil likely burned away in the fire.

BC VIEWS: Action needed on healthcare workplace violence

While we’ve been talking about it, the number of B.C. victims has only grown

Closing arguments begin in B.C. case launched in 2009 over private health care

Dr. Day said he illegally opened the Cambie Surgery Centre in 1996 in order to create more operating-room time

MacLean says “Coach’s Corner is no more” following Cherry’s dismissal from Hockey Night

Cherry had singled out new immigrants in for not honouring Canada’s veterans and fallen soldiers

MacKinnon powers Avs to 5-4 OT win over Canucks

Vancouver battled back late to pick up single point

Dallas Smith, Terri Clark to perform on CP Holiday Train’s B.C. stops

Annual festive food bank fundraiser rolling across province from Dec. 11 to 17

Poole’s Land finale: Tofino’s legendary ‘hippie commune’ being dismantled

Series of land-use fines inspire owner Michael Poole to sell the roughly 20-acre property.

Most Read