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

Talking about diversity in Mission

Eighth annual Cycling4Diversity ride takes place Friday, ending at Mission City Hall

Loading zones in downtown Mission not necessary says DBA president

They take away much-needed parking spots from potential customers according to business association

Sunset Market returns to Mission’s Fraser River Heritage Park

First market takes plac May 21, followed by June 18, July 16 and August 20 from 5-9 p.m.

Vandals splash paint across new inclusion walkway

The rainbow coloured area in front of the Mission Public Schools office was damaged early Thursday

Chilliwack garden party planned for African organization

Christa Roby of Health in Motion for Africa back home for fundraiser

Jeep totalled, four young people in hospital, after single-vehicle crash in Surrey

Mounties have not ruled out any possible factors in what led to the overnight crash

Update: Mother dead, child in critical condition after carbon monoxide poisoning at Shuswap campground

The woman was found unresponsive insider her tent and the youth was taken via air ambulance to hospital

Kelowna RCMP interrogation video brings home reality in ‘visceral way’: former TRC chairman

Video of Mountie interrogating young Indigenous woman disclosing sexual abuse under fire

Canada’s parole officers say correctional system has reached breaking point

About half of Canada’s federal parole officers work inside penitentiaries and correctional institutions

Montreal researchers create audible hockey puck for visually impaired players

Three years ago, Gilles Ouellet came up with the idea for a puck that makes a continuous sound

Cloverdale Rodeo competition promises to be a ‘nail-biter’ this weekend

New challengers giving returning champions a run for their money

Former B.C. Greyhound bus drivers head to Penticton for goodbye party

Big bash runs until Sunday, funded by drink cans left behind on busses over the years

Boy, 12, arrested after allegedly pulling a knife on another child at a Surrey park

The child was later released into his parents’ custody as Surrey RCMP continue their investigation

Full-scale search underway for missing kayaker on Okanagan Lake

Kelowna Paddle Centre member Zygmunt Janiewicz, 71, failed to return from his ‘daily kayak’ on the lake

Most Read