WestJet suspends 2019 financial guidance in light of Boeing 737 MAX grounding

Published on : Monday, March 18, 2019

Today WestJet announced that following Transport Canada’s safety notice closing Canadian airspace to Boeing 737 MAX aircraft until further notice, the Federal Aviation Administration’s temporary grounding order and Boeing’s decision to suspend all MAX deliveries to airline customers, it is suspending all 2019 financial guidance provided on December 4, 2018and February 5, 2019. The financial guidance provided with respect to earnings per share (EPS), return on invested capital (ROIC) and cumulative free-cash flow over the period of 2020-2022 remains in place until further information is known.

 

Through proactive planning and preparation for a variety of scenarios, including grounding, WestJet enacted its contingency plan immediately and grounded all thirteen of its MAX aircraft within 55 minutes of Transport Canada’s order with only three MAX aircraft outside of its Canadian jurisdiction. WestJet continues to implement and execute its contingency plan to minimize guest disruption and any financial impact. For the remainder of the first quarter WestJet expects it will be able to protect approximately 86 per cent of guests booked on MAX flights and cover approximately 75 per cent of the flights that were intended to operate on the MAX with other aircraft.

 

Caution regarding forward-looking information
Certain information set forth in this news release, including, without limitation, information underlying all of WestJet’s 2019 guidance and guidance over the period of 2020 to 2022 with respect to earnings per share, return on invested capital and cumulative free cash flow, the continued implementation, execution and effect of WestJet’s contingency plan and our expectations around ability and impact to guests and flights, is forward-looking information within the meaning of applicable securities laws. By its nature, forward-looking information is subject to numerous risks and uncertainties, some of which are beyond WestJet’s control. The forward-looking information contained in this news release is based on assumptions regarding the terms of agreements which WestJet has entered into, WestJet’s current forecasts and strategy, the timing and impact of WestJet’s initiatives, the expected demand environment, access to financing and to infrastructure, the fleet and its utilization and operational performance, aircraft deliveries and option exercises, the forward-curve for jet fuel price, the expected exchange rate of the Canadian dollar to the U.S. dollar, expected tax rates, agreements and bookings, assessment of labour and infrastructure requirements, expectations around legislation and legislative changes, assessment of collective bargaining, assessment of legal proceedings, and other information underlying the targets contained herein, but may vary due to factors including, but not limited to, length of time of, and/or any changes to the decisions, parameters and/or applicability of, the decisions of Transport Canada, the Federal Aviation Administration and/or Boeing, changes in guest demand, changes in fuel prices, delays in aircraft delivery, general economic conditions, competitive environment, ability to effectively implement and maintain critical systems, material adverse regulatory changes, and other factors and risks described in WestJet’s public reports and filings which are available under WestJet’s profile at sedar.com. Readers are cautioned that undue reliance should not be placed on forward-looking information as actual results may vary materially from the forward-looking information. WestJet does not undertake to update, correct or revise any forward-looking information as a result of any new information, future events or otherwise, except as may be required by applicable law.

 

Source:- WestJet Airways

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