WestJet announces 19th consecutive quarter of profitability
Airline reports fourth quarter net earnings of $20.2 million
February 17, 2010
WestJet today announced its fourth quarter and full-year results for 2009. The airline reported fourth quarter net earnings of $20.2 million or 14 cents per diluted share and full-year net earnings of $98.2 million or 74 cents per diluted share. The airline's results were impacted by a non-recurring net future income tax reduction during 2009. Excluding this gain, WestJet reported adjusted fourth quarter net earnings of $15.1 million or 11 cents per diluted share and adjusted full-year net earnings of $93.1 million or 71 cents per diluted share.
'We are pleased to report that WestJet finished 2009 with its 19th consecutive quarter of profitability,' commented WestJet President and CEO Sean Durfy. 'Achieving four quarters of profitable results in a year that will be remembered as the world's worst recession since the great depression is truly a testament to the ability of our WestJetters and our solid business model. The additional challenges of H1N1 and enhanced security measures made this an extremely difficult business environment for the airline industry. However, our WestJetters once again demonstrated that our company can deliver industry-leading financial results despite the pressures.'
The airline reported a fourth quarter operating margin of 6.3 per cent compared to 9.6 per cent in the same quarter of 2008. For the full year, West Jet achieved an operating margin of 9.2 per cent compared to a 2008 margin of 11.5 per cent.
'For the fourth quarter and the full year, we were once again one of the top performers in the North American airline industry,' said Sean Durfy. 'Throughout the year, we strengthened our balance sheet, tightened our cost controls and laid the foundation for continued growth. We also focused on key initiatives including the expansion of WestJet Vacations and the implementation of our new reservation system. Thank you to our exceptional WestJetters for their many accomplishments and ongoing commitment to our airline's success.'
2008 comparatives have been restated due to a change in accounting policy. * Refer to reconciliations in the accompanying tables for further information regarding adjustments.
'In the fourth quarter, we added five new aircraft for a year-end total of 86. Our fleet is serving our growing network of 68 destinations in Canada, U.S., the Caribbean and Mexico," said Sean Durfy. "Our fourth quarter RASM decline of 10 per cent was less of a decline than we expected thanks to a better than anticipated December. RASM continues to be closely managed by carefully balancing load factor and yield.'
Sean Durfy also commented on the progress of WestJet's new reservation system, 'We have been working diligently to get our service levels back to our high standards. We are pleased to report that call centre wait times are very close to pre-cutover levels. We are grateful for the understanding that our guests have demonstrated. Our WestJetters are working very hard to put this disruption behind us. We are excited about the enhanced functionality that our new reservation system enables including additional opportunities for ancillary revenues and more seamless partnerships with other airlines.'
WestJet took a further delivery of a 737-800 series aircraft in February 2010, and the airline plans to take delivery of an additional 737-700 before the end of the first quarter of 2010 bringing its fleet size to 88 aircraft. The airline also anticipates a seven per cent increase in capacity in the first quarter of 2010 compared to the same period in 2009.
'While reports of an economic rebound are starting to surface, we remain cautious in our predictions of recovery,' added Sean Durfy. 'We believe that we will continue to see pressure on fares in the first quarter of 2010. Although it is still early, it appears that first quarter RASM is tracking to a year-over-year decline of less than five per cent.'
'We look back on 2009 as a foundational year, and in 2010 we are focused on finishing what we started,' stated Sean Durfy. 'In the first quarter we will launch our frequent guest and credit card programs. Throughout 2010, we will enter into additional strategic partnerships with other airlines and continue expanding WestJet Vacations, both of which we believe will enhance our future revenue growth. The strength and leadership of our WestJetters turned 2009 into a profitable year with significant accomplishments, and we have every reason to believe that we can carry this momentum into 2010.'
West Jet also reported fourth quarter operational performance. WestJet calculates its on-time performance (the percentage of flights that arrived within 15 minutes of their scheduled time) and completion rate (the percentage of flights completed from flights originally scheduled) 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. The airline strives to be one of the top North American airlines for these three operational performance metrics.
The airline's on-time performance declined in the fourth quarter due to a number of factors including disruptions caused by winter weather, increased security measures and the initial cutover to its new reservation system.
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