Airline shares zigzag after Canada, U.S. ground Boeing 737 Max aircraft - Action News
Home WebMail Wednesday, November 13, 2024, 06:48 AM | Calgary | -0.3°C | Regions Advertise Login | Our platform is in maintenance mode. Some URLs may not be available. |
Business

Airline shares zigzag after Canada, U.S. ground Boeing 737 Max aircraft

Shares of most North Americanairlines fell after the U.S. and Canadaannounced theyweregrounding all Boeing 737 Max8 planes, and banning the aircraft from its airspace on Wednesday.

Shares of Air Canada fell by nearly 2% after the Canadian announcement, while WestJet was down 1.6%

Air Canadawhich has 24 of the Boeing 737 Max 8 aircraft in operation is among the biggest users of the aircraft in the world. (Darryl Dyck/Canadian Press)

Shares of most North Americanairlines fellafter the U.S. and Canadaannounced theyweregrounding all Boeing 737 Max8 planes, and banning the aircraft from its airspace on Wednesday.

In Toronto, shares of Air Canadawhich has 24 of the Boeing aircraft in operation, and is among the biggest users of the aircraft in the worldfell nearly twoper cent after the announcement from Ottawa in the morning. But, shares recovered some losses to close down0.1 per cent at $32.01.

The national carrier said it would immediatelycomply with Transport Canada's safety notice to shut downoperations of the aircraft, and its cancellation and rebooking policies were in place with "full fee waiver" for affected customers.

"We are working to rebook impacted customers as soon as possible, but given the magnitude of our 737 MAX operations, which on average carry nine to twelve thousand customers per day, customers can expect delays in rebooking and in reaching Air Canada call centres," the airline said in a statement.

"We appreciate our customers' patience. Customers are further advised to check the status of their flight onaircanada.comprior to going to the airport."

Shares ofWestJetAirlines fell 1.6per cent to close at $19.60, also going into the redfrom positive territory in the morning. The Calgary-based carrier has 13 Boeing 737 Max 8 in its fleet.

WestJetalso announced on Twitter that it wascomplying with Transport Canada's decision, andfour of its planes operatingwithin North America had landed safely at their destinations.

"We have implemented flexible change guidelines for those guests booked on the MAX who wish to make changes to their travel arrangements," WestJet said on Twitter.

Shares of the two airlines have fallen more than threeper cent this week after the crash of the Ethiopian Airlines plane that killed all 157 people on board, including 18 Canadians, on Sunday.

Budget airline Sunwing was the first Canadian airline to suspend flights for four of its Boeing 737 Max 8 planes on Tuesday, following amove by airlines and countries around the world after the second fatal crash of the Boeing plane in recent months.

Tim James, analyst at TD Securities, said operations for Canada's two biggest carriers Air Canada and WestJetcould be negatively impacted by the aircraft grounding.

"We believe that both airlines have some fleet flexibility to be able to re-accommodate passengers if 737 MAX flights were negatively affected for any reason," James said in a note.

"If a 737 MAX grounding was prolonged, we believe that this could also negatively affect MAX production rates and deliveries."

In the U.S., shares of Southwest Airlines, which has the most Boeing 737 Max planes in operation globally, slidafter the U.S. announcement, but closed 0.4 per cent higher.

Shares of planemaker Boeing, meanwhile, closed up 0.5 per cent after trading lower for much of the day. Its shares have fallen more than 10per cent this week, dragging down the Dow Jones industrial average.