Air Canada, WestJet expected to take financial hit from 737 Max 8 ban

The ban comes four days after the Ethiopian Airlines disaster that killed all 157 people on board

Canada’s two biggest airlines and some of their passengers are in for a turbulent ride after Transport Minister Marc Garneau announced a ban on all Boeing 737 Max 8 aircraft from Canadian airspace over safety concerns.

“For a week or two, it will be bedlam and chaos,” said Marvin Ryder, an assistant professor of marketing at McMaster University.

Garneau described the decision to ground the plane as a precautionary move that was made after a review of all the available evidence, four days after the Ethiopian Airlines disaster that killed all 157 people on board.

Air Canada has 24 Max 8s in its fleet and WestJet Airlines Inc. has 13. The carriers use the commuter planes daily to ferry passengers on routes that include Vancouver-Calgary, Honolulu-Vancouver, Vancouver-Montreal and Montreal-Los Angeles.

Ryder estimates the ban would cost the two airlines $100 million collectively in the first 10 days.

“They don’t have another 24 jets just sitting parked somewhere that they can bring into service to cover it…They’ll have to cancel flights,” he said.

Ryder explained the airlines may try to cut the number of flights on some routes and replace the Max 8 jetliners with larger planes.

The airlines’ shares reacted immediately to Garneau’s announcement, falling slightly before Air Canada’s rebounded while WestJet’s were down 1.66 per cent in midday trading. Prior to the announcement, their shares were down 3.4 per cent and 2.5 per cent, respectively, between Friday closing and Wednesday morning trading.

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

The suspension comes as thousands of Canadians are away on March break, stoking fears of stranded passengers and rebooking delays.

Air Canada and WestJet both said they are in the process of grounding their Max 8s.

Air Canada said it will grant affected customers a full fee waiver.

“We are working to rebook impacted customers as soon as possible but given the magnitude of our 737 Max operations which on average carry 9,000 to 12,000 customers per day, customers can expect delays in rebooking and in reaching Air Canada call centres and we appreciate our customers’ patience,” the company said in a statement.

WestJet noted that the grounding order affects just eight per cent of its 162-plane fleet.

Air Canada’s 4,000 pilots and 8,500 flight attendants said in separate statements they support Garneau’s move “to err on the side of prudence,” in the words of the Canadian Union of Public Employees.

Boeing Co., which makes the 737 Max 8, has seen its share price drop by more than 11 per cent in the past three days — a loss of more than US$26.6 billion.

As questions grow around the plane’s safety, Boeing rival Airbus SE has seen its stock rise nearly six per cent to US$132.45.

More than 40 countries have grounded or banned the Max 8 from their airspace since the crash over safety concerns and possible parallels to an Oct. 29 incident which saw the same type of aircraft plunge into the Java Sea, killing 189 people.

READ MORE: Canadians swamp airlines with safety concerns around Boeing 737 following crash

Aviation authorities in the U.S. have expressed continued confidence in the aircraft, despite mandating a software update following Sunday’s crash.

Chris Reynolds, The Canadian Press

Like us on Facebook and follow us on Twitter.

Just Posted

Filipino Heritage Month event takes over Centennial Square

Dancing, music and food highlight Mabuhay Day celebration in Victoria

West Shore residents report finding anti-SOGI 123 flyers in mailboxes

SD62 trustee Ravi Parmar says the flyers are ‘garbage’

Saanich woman runs marathons to make dreams come true

Hempler gutted her way through 122 kms with minimal breaks, to support Help Fill a Dream Foundation

Tsartlip canoe team pulls for international glory in Australia

Geronimo Canoe Club paddles to Victoria to kick-start fundraising

Colwood resident cycles for 12.5 hours to raise money for hospice

Graham Hales will participate in the Cycle of Life tour in July

Victoria Weekender: What’s happening this weekend, June 15-16

Car Free YYJ, a barber battle and an Outdoor Discovery Day

Homalco tour gives glimpse into area’s ‘People, Land, Water’

First Nation business mixes cultural components with wildlife excursions

Monkey spotted on late-night jaunt in Campbell River

Conservation officers also apparently looking for cougar in the area

B.C. university to offer mentorship program for former youth in care

Students using the provincial tuition waiver program will soon be able to form a community at KPU

Cyclists competing in one of the toughest bike races on the planet pass through Fernie

Divide riders looking strong as they finish first leg of 4160 km race

You might not know these B.C. records are public

Hired a lawyer to file a civil claim? Those are published online

B.C. bus driver loses case to get job back after texting while driving full bus

An arbitator ruled that Tim Wesman’s phone usage was a “a reckless disregard for public safety”

Revamped B.C. Lions set to battle veteran Winnipeg Blue Bombers

The Lions’ first test of the season will be a big one

No business case for Trans Mountain expansion, says former environment minister

Cabinet is expected to announce its decision on the expansion of the Alberta-to-B.C. pipeline by Tuesday

Most Read