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Indiaexportnews.com

WestJet stays the course with profitable first quarter results

  06.05.2009    

WestJet announced first quarter results for 2009. The airline reported net earnings of $37.4 million, or 29
cents per diluted share.
"Thanks to the continued hard work and dedication of our WestJetters, we once again differentiated ourselves as an industry leader, and we are extremely pleased with our strong start to 2009," commented Sean Durfy,
WestJet President and CEO. "Our first quarter results demonstrate that our business strategy is staying the course; we successfully continued our growth and delivered profitable results while withstanding less than ideal economic conditions."
Compared to airlines who have reported their first quarter results, WestJet continues to have one of the best pre-tax margins in North America, having reported a first quarter earnings before tax (EBT) margin of 8.7 per
cent.
"Our results reinforce the value of our healthy brand, unrivaled guest experience and commitment to being cost efficient," added Sean Durfy.

   Operating highlights (stated in Canadian dollars)

    ------------------------------------------------------------------------
                                                 Q1          Q1
                                                2009        2008      Change
    -------------------------------------------------------------------------
    Net earnings (millions)         $37.4       $52.5      (28.7%)
    -------------------------------------------------------------------------
    Diluted earnings per share   $0.29       $0.40      (27.5%)
    -------------------------------------------------------------------------
    Revenue (millions)                $579.3      $599.3       (3.3%)
    -------------------------------------------------------------------------
    ASM (available seat miles)
   (billions)                                 4.357       4.065        7.2%
    -------------------------------------------------------------------------
    RPM (revenue passenger miles)
    (billions)                                3.502       3.331        5.1%
    -------------------------------------------------------------------------
    Load factor                            80.4%       81.9%   (1.5 pts.)
    -------------------------------------------------------------------------
    Yield (revenue per revenue passenger
     mile) (cents)                             16.54       17.99       (8.1%)
    -------------------------------------------------------------------------
    RASM (revenue per available seat mile)
     (cents)                                   13.30       14.74       (9.8%)
    -------------------------------------------------------------------------
    CASM (cost per available seat mile)
     (cents)                                   11.90       12.71       (6.4%)
    -------------------------------------------------------------------------
    CASM excluding fuel and employee
     profit share (cents)                  8.50        8.26        2.9%
    -------------------------------------------------------------------------

Sean Durfy continued, "While the weakened economy had a negative impact on our first quarter financial results, our margins continued to be among the strongest in North America. Softening demand, aggressive competitor pricing and Easter falling in the second quarter of 2009, versus the first quarter of
2008, all contributed to our decline in RASM. However, lower fuel prices resulted in a decline in CASM and contributed to our overall profitability."
WestJet took delivery of two 800-series aircraft in the first quarter; and in early April, it took delivery of its only aircraft scheduled to arrive in the second quarter, bringing its fleet size to 79. For the balance of the
year, WestJet plans to receive an additional seven aircraft, bringing its fleet to 86.
"The flexibility of our fleet deployment strategy allows us to react to changes in market demand by adjusting our schedule for more favourable flying," explained Sean Durfy. "In the second quarter, we have adjusted our
flight schedules to reduce some of our flying as we take into consideration the current demand environment. This will lower our previously planned second quarter capacity growth to between one and two per cent. We anticipate that competitors will continue to withdraw capacity, which we believe will allow us
to capture additional market share as we continue to grow into domestic,
transborder and international markets."
This morning, in a separate news release, the airline reported its April traffic results and expectations for second quarter RASM. Sean Durfy said, "With the weakened economy, second quarter RASM is tracking to year-over-year declines that are, at best, similar to what we experienced in the first quarter of 2009. The recent H1N1 influenza virus outbreak appears to be delaying some consumers' travel bookings; however, it is too early to determine how it will impact RASM. Despite these conditions, we are confident in our business model and our organization's ability to continue on our profitable path."
"Our recently introduced WestJet Care-antee, which is a set of promises we vow to uphold, is setting a new standard for service and value in the Canadian airline industry," added Sean Durfy. "Thanks to our dedicated team of WestJetters, we will continue to profitably grow our business by providing an unrivalled guest experience and by enhancing our airline in ways that truly benefit our guests."
WestJet also reported first quarter operational performance. WestJet calculates on-time performance and completion rate based on the U.S. Department of Transportation's standards. WestJet's baggage ratio represents the number of delayed or lost baggage claims made per 1,000 guests.

    -------------------------------------------------------------------------
                                             Q1 2009     Q1 2008      Change
    -------------------------------------------------------------------------
    On-time performance        70.6%       69.0%    1.6 pts.
    -------------------------------------------------------------------------
    Completion rate                97.5%       98.1%   (0.6 pts.)
    -------------------------------------------------------------------------
    Bag ratio                             4.41        5.15       14.4%
    -------------------------------------------------------------------------

   



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