Air Canada had to divert a Boeing Co 737-8 Max aircraft en route between Arizona and Montreal with three crew members on board following an engine problem, Reuters reported, citing an emailed statement by the Canadian airline.
The incident forced the Air Canada crew to divert the Boeing (BA) aircraft to Tucson, Arizona on Friday. Shortly after the take-off, the pilots received an “engine indication” and “decided to shut down one engine,” an Air Canada spokesman told Reuters. “The aircraft then diverted to Tucson, where it landed normally and remains.”
According to Belgian aviation news website Aviation24.be, the crew received a left engine hydraulic low pressure indication and declared a PAN PAN emergency before diverting the flight. The event took place on Dec. 22.
“Modern aircraft are designed to operate with one engine and our crews train for such operations,” the Air Canada statement added.
The incident could pose another setback for Boeing, which is already grappling with the financial fallout caused by the pandemic-led halt in air travel demand. It also comes after the US aviation regulator last month suspended a 20-month grounding order that halted commercial operations of its 737-8 MAX and 737-9s, following two fatal crashes.
Meanwhile, BA shares are still down 34% so far this year as COVID-19 travel restrictions have resulted in a deep cut in the number of commercial jets and services Boeing customers need over the next few years. (See BA stock analysis on TipRanks)
On Dec. 21, Susquehanna analyst Charles Minervino reduced his 4Q EPS estimate to $(1.36) from $(0.33), citing recent data on aircraft orders and deliveries for the first two months of the current quarter.
“The recertification of the 737 MAX is a major milestone this quarter, but given the time of year, COVID restrictions and travel constraints, we do not think there is enough time for BA to reach our prior 737 delivery expectation of 30 aircraft this quarter,” Minervino wrote in note to investors. The analyst maintained a Buy rating on the stock with a $275 price target (27% upside potential).
The rest of the Street has a cautiously optimistic Moderate Buy analyst consensus based on 9 Buys, 8 Holds, and 3 Sells. That’s with an average analyst price target of $226.41, indicating 4.4% upside potential over the coming 12 months.
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