WestJet suspends 2019 financial forecast after Boeing groundings

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WestJet Airlines Ltd. on Monday became the second Canadian carrier to suspend its 2019 financial projections following the groundings of Boeing 737 MAX aircraft worldwide.

More than 300 Boeing 737 MAX passenger jets have been taken out of service globally following a fatal plane crash in Ethiopia this month, the second deadly disaster for the same type of plane in five months.

On Friday, Air Canada suspended its forecast, while U.S. airline United warned of an “adverse effect” on operations if the jets remained grounded in the summer travel season.

WestJet, which operates 13 MAX jets and is Canada’s second largest airline, said its 2020-2022 outlook for earnings per share, free cash flow and return on capital investment remained in place for now.

For 2019, the company was expecting revenue per available seat mile, a key industry metric, to rise 2.0 per cent to 4.0 per cent on an annual basis, driven by higher travel demand.

WestJet’s shares were down one per cent at $19.45 Cdn in afternoon trading, while Boeing’s stock was down 2.5 per cent at $369.40 US.

The airline says it expects about 86 per cent of its passengers will not have to change their bookings and it will find alternative planes for about 75 per cent of Max flights.



Source

Business News

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