WestJet suspends 2019 forecasts after Boeing groundings

FILE PHOTO: WestJet airline signage is pictured at Vancouver's international airport in Richmond, British Columbia, Canada, February 5, 2019. REUTERS/Ben Nelms

(Reuters) - 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.

Over 300 Boeing 737 MAX passenger jets have been taken out of service globally following a fatal plane crash in Ethiopia eight days ago, the second deadly disaster for the same type of plane in five months.

On Friday, Air Canada suspended its financial outlook, while U.S. carrier United Airlines 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 projections 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 between 2 percent and 4 percent, driven by higher travel demand.

“WestJet continues to implement and execute its contingency plan to minimize guest disruption and any financial impact,” it said in a statement.

The company expects to cover some three-fourths of the flights intended to run on the MAX with other aircraft.

Investigators probing the Boeing crash in Ethiopia have found similarities in vital flight angle data with an airplane that came down off Indonesia, a source said, hiking pressure on the world’s biggest planemaker.

WestJet’s shares were down 1 percent at C$19.45 in afternoon trading, while Boeing’s shares were 2.5 percent lower at $369.40.

Reporting by Shanti S Nair in Bengaluru; Editing by Sai Sachin Ravikumar