Air Canada expects hit in Q1 of 2020 due to novel coronavirus and MAX grounding
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Air Canada expects hit in Q1 of 2020 due to novel coronavirus and MAX grounding

MONTREAL — Air Canada says its first quarter is expected to be hurt by the suspension of flights to mainland China and from Toronto to Hong Kong due to the novel coronavirus, the continued grounding of its fleet of Boeing 737 MAX aircraft and increased maintenance and pension costs.

The airline says it expects its first-quarter earnings before interest, taxes, depreciation and amortization to be about $200 million lower than the first quarter of 2019.

The outlook came as Air Canada reported a fourth-quarter profit of $152 million or 56 per diluted share compared with a net loss of $360 million or $1.33 per diluted share in the fourth quarter of 2018.

The fourth quarter of 2019 included foreign exchange gains of $92 million while the last three months of 2018 included foreign exchange losses of $444 million.

On an adjusted basis, Air Canada says it earned $47 million or 17 per diluted share in the fourth quarter of 2019 compared with an adjusted profit of $55 million or 20 cents per diluted share in the fourth quarter of 2018.

Analysts on average had expected an adjusted profit of 38 cents per share for the quarter, according to financial markets data firm Refinitiv.

Operating revenue totalled nearly $4.43 billion, up from nearly $4.23 in the same quarter a year earlier.

This report by The Canadian Press was first published Feb. 18, 2020.

Companies in this story: (TSX:AC)

 

The Canadian Press

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