Air Canada reported said it was expecting that ongoing MAX issue and coronavirus to drag down its numbers for the first quarter of 20220, according to a report from analysts Cowen.
Air Canada said the combination of the continued MAX grounding and coronavirus would drive a C$200m EBITDA decline in the Q1 2020 , compared with the same period in 2019 as well as higher maintenance related expenses. Cowen analysts said they expected Air Canada’s share price to be under pressure as a result
The Canadian carrier’s results in Q4 2019 were also below expectations due to reservation system and share-based compensation issues said Cowen, with total revenue in the quarter standing at C$4.429 billion, compared with Cowen’s to estimate of C $4.483 billion. This was despite Air Canada reporting an increase in passenger traffic of 2.9% over the period.
Cowen said Air Canada’s results were below expectations due in large part to the one-time negative impact from the transition to a new reservation system in mid-November, and higher than expected stock-based and other compensation expenses.
Results were also negatively impacted by the grounding of the 737 MAX, which resulted in fewer connecting passengers in the fourth quarter and Cowen said the ongoing grounding of the Boeing plane and the negative impact of the coronavirus would continue to hurt Air Canada into 2020.
Air Canada does not expect a full recovery in China and Hong Kong traffic until the third quarter of 2020 fully recovering in 3Q20.
Coronavirus and MAX issues weigh on Air Canada results says Cowen
