Declares a first quarter dividend of $0.05 per share

CALGARY, Feb. 9 /PRNewswire-FirstCall/ - WestJet (TSX:WJA) today announced its fourth quarter and full-year results for 2010. The airline reported fourth quarter net earnings of $47.9 million, or $0.33 cents per diluted share. Excluding special items, this represents record fourth quarter net earnings and an increase of 217 per cent compared to the fourth quarter of 2009. WestJet reported full-year net earnings of $136.7 million, or $0.94 cents per diluted share.

"To finish 2010 with our 23rd consecutive profitable quarter, one in which we saw our net earnings increase 217 per cent, is an accomplishment we are all very proud of," commented WestJet President and CEO Gregg Saretsky. "These strong results would not have been possible without the dedication of the more than 8,000 WestJetters who are committed to the continued growth and success of our airline."

WestJet reported a fourth quarter operating margin of 11.4 per cent, compared to 6.3 per cent in the fourth quarter of 2009. For the full year, WestJet achieved an operating margin of 9.5 per cent compared to a 2009 margin of 9.2 per cent, among the best performances of North American airlines.

Operating highlights (stated in Canadian dollars) ------------------------------------------------------------------------- Full- Full- year year Q4 2010 Q4 2009 Change 2010 2009 Change ------------------------------------------------------------------------- Net earnings (millions) $47.9 $20.2 137.5% $136.7 $98.2 39.3% ------------------------------------------------------------------------- Net earnings, excluding special items* (millions) $47.9 $15.1 216.8% $142.8 $93.1 53.3% ------------------------------------------------------------------------- Diluted earnings per share $0.33 $0.14 135.7% $0.94 $0.74 27.0% ------------------------------------------------------------------------- Diluted earnings per share, excluding special items* $0.33 $0.11 200.0% $0.98 $0.71 38.0% ------------------------------------------------------------------------- Total revenues (millions) $692.8 $570.0 21.5% $2,609.3 $2,281.1 14.4% ------------------------------------------------------------------------- Operating margin 11.4% 6.3% 5.1 pts. 9.5% 9.2% 0.3 pts. ------------------------------------------------------------------------- ASMs (available seat miles) (billions) 5.021 4.413 13.8% 19.535 17.588 11.1% ------------------------------------------------------------------------- RPMs (revenue passenger miles) (billions) 3.942 3.461 13.9% 15.613 13.835 12.9% ------------------------------------------------------------------------- Load factor 78.5% 78.4% 0.1 pts. 79.9% 78.7% 1.2 pts. ------------------------------------------------------------------------- Yield (revenue per revenue passenger mile) (cents) 17.58 16.47 6.7% 16.71 16.49 1.3% ------------------------------------------------------------------------- RASM (revenue per available seat mile) (cents) 13.80 12.92 6.8% 13.36 12.97 3.0% ------------------------------------------------------------------------- CASM (cost per available seat mile) (cents) 12.23 12.10 1.1% 12.09 11.77 2.7% ------------------------------------------------------------------------- CASM, excluding fuel and employee profit share (cents)* 8.51 8.67 (1.8%) 8.52 8.45 0.8% ------------------------------------------------------------------------- * Refer to reconciliations in the accompanying tables for further information regarding adjustments.

"The launch of our Frequent Guest and Credit Card programs and the ongoing additions to our airline partnerships are examples of how we are now capitalizing on the significant investment in our reservations systems," said Gregg Saretsky. "Revenue momentum is building and we will continue to exploit the opportunities that the new systems afford us, positioning us well for continued profitable growth."

WestJet grew throughout 2010; the airline increased capacity by 13.8 per cent in the fourth quarter and ended the year with an 11.1 per cent capacity increase. Traffic expansion was in line with the capacity increase in the fourth quarter and revenue per available seat mile (RASM) was up 6.8 per cent primarily due to the strengthening yield. Operational performance was equally strong with an 11.6 point increase in on-time performance and a 30.7 per cent improvement in baggage handling for the fourth quarter.

WestJet is expecting fuel costs, excluding hedging, to range between $0.82 and $0.84 per litre for the first quarter of 2011. "Our controllable costs remain in check and we feel our low-cost structure and fuel efficient fleet have us well equipped to withstand fuel price volatility," said Gregg Saretsky. "We also expect the positive RASM trend to continue into the first quarter of 2011 and estimate that year-over-year improvements will be roughly in line with those reported in the fourth quarter."

WestJet announced, as part of its ongoing fleet planning review, the deferral of six aircraft deliveries from 2012 (2), 2013 (1), 2014 (2) and 2015 (1) out to 2017 (3) and 2018 (3). "The decision to defer these aircraft deliveries increases the flexibility in our fleet plan and creates some additional pricing power for us at a time of rising fuel costs and global economic uncertainty, all without deviating from our long-term growth strategy. The entirety of our order with Boeing remains intact," commented Gregg Saretsky. "This revised delivery schedule allows us to better match the timing of those deliveries with the dates for potential lease returns which permits us to accelerate or decelerate capacity growth dependent on economic and market conditions."

WestJet's board of directors declared a cash dividend of $0.05 per common voting share and variable voting share for the first quarter of 2011, to be paid on March 31, 2011, to shareholders of record on March 16, 2011. All dividends paid by WestJet are, pursuant to subsection 89(14) of the Income Tax Act, designated as eligible dividends, unless indicated otherwise. An eligible dividend paid to a Canadian resident is entitled to the enhanced dividend tax credit.

Caution regarding forward-looking statements

Certain information set forth in this news release, including information regarding airline partnerships, revenue momentum, exploitation of opportunities from new systems, continued profitable growth, fuel costs for the first quarter of 2011, impact of our low-cost structure, anticipated increases in RASM in the first quarter of 2011, capacity to withstand fuel price volatility, aircraft delivery schedule and growth strategy and corporate vision, contain forward-looking statements. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond WestJet's control. These forward-looking statements are based on currently available implementation plans, agreements and bookings, but may vary due to factors including, but not limited to, changes in consumer demand, changes in fuel prices, delays in aircraft delivery, changes in guest demand, general economic conditions, competitive environment, ability to effectively implement and maintain critical systems and other factors described in WestJet's public reports and filings, which are available on WestJet's profile at www.sedar.com. Readers are cautioned that undue reliance should not be placed on forward-looking statements as actual results may vary materially from the forward-looking statements. WestJet does not undertake to update, correct or revise any forward-looking statements as a result of any new information, future events or otherwise, except as may be required by applicable law.

Management's Discussion & Analysis and the Consolidated Financial Statements and Notes for the three and twelve months ended December 31, 2010, are available on www.westjet.com or WestJet's SEDAR profile at www.sedar.com.

Conference call

WestJet will hold its quarterly analysts' conference call today, February 9, 2011, at 7 a.m. MST (9 a.m. EST). President and CEO Gregg Saretsky and Executive Vice-President of Finance and CFO Vito Culmone will discuss WestJet's 2010 fourth quarter and year-end results and answer questions from financial analysts and members of the media. The conference call is available in Toronto by calling 647-427-7450 and outside Toronto through the toll-free telephone number 1-888-231-8191. The call can also be heard through an Internet webcast in the Media and Investor section of www.westjet.com.

About WestJet

WestJet is Canada's favourite airline, offering scheduled service throughout its 71-city North American and Caribbean network. Inducted into Canada's Most Admired Corporate Cultures Hall of Fame and named one of Canada's best employers, WestJet pioneered low-cost flying in Canada. WestJet offers increased legroom, leather seats and live seatback television provided by Bell TV on its modern fleet of 93 Boeing Next-Generation 737 aircraft. With future confirmed deliveries for an additional 42 aircraft through 2018, WestJet strives to be one of the five most successful international airlines in the world.

Consolidated Statement of Earnings (Stated in thousands of Canadian dollars, except per share amounts) (Unaudited) ------------------------------------------------------------------------- Three months ended Twelve months ended December 31 December 31 2010 2009 2010 2009 ------------------------------------------------------------------------- Revenues: Guest $ 641,905 $ 528,104 $ 2,405,281 $ 2,067,860 Other 50,910 41,938 203,980 213,260 ------------------------------------------------------------------------- 692,815 570,042 2,609,261 2,281,120 Expenses: Aircraft fuel 179,276 148,853 674,608 570,569 Airport operations 100,356 91,901 388,392 352,333 Flight operations and navigational charges 80,466 73,313 325,754 298,762 Sales and distribution 67,048 50,383 255,777 172,326 Marketing, general and administration 52,286 54,659 195,185 208,316 Aircraft leasing 36,687 25,096 142,242 103,954 Depreciation and amortization 32,686 36,836 132,894 141,303 Inflight 31,889 26,716 124,303 112,054 Maintenance 25,875 23,884 100,339 96,272 Employee profit share 7,442 2,297 22,222 14,675 ------------------------------------------------------------------------- 614,011 533,938 2,361,716 2,070,564 ------------------------------------------------------------------------- Earnings from operations 78,804 36,104 247,545 210,556 Non-operating income (expense): Interest income 3,607 1,554 9,910 5,601 Interest expense (14,302) (16,366) (60,164) (67,706) Loss on foreign exchange (1,347) (754) (780) (12,306) Gain (loss) on disposal of property and equipment (95) (324) 190 (1,177) Gain (loss) on derivatives 365 2,817 (34) 1,828 ------------------------------------------------------------------------- (11,772) (13,073) (50,878) (73,760) ------------------------------------------------------------------------- Earnings before income taxes 67,032 23,031 196,667 136,796 Income tax expense: Current 458 588 1,573 2,690 Future 18,666 2,268 58,374 35,928 ------------------------------------------------------------------------- 19,124 2,856 59,947 38,618 ------------------------------------------------------------------------- Net earnings $ 47,908 $ 20,175 $ 136,720 $ 98,178 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- Earnings per share: Basic $ 0.33 $ 0.14 $ 0.94 $ 0.74 Diluted $ 0.33 $ 0.14 $ 0.94 $ 0.74 ------------------------------------------------------------------------- Weighted average number of shares outstanding - basic 144,292,212 144,257,857 144,852,548 132,130,009 Weighted average number of shares outstanding - diluted 144,559,472 144,328,206 145,119,896 132,261,770 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Consolidated Balance Sheet (Stated in thousands of Canadian dollars) (Unaudited) ------------------------------------------------------------------------- December 31, December 31, 2010 2009 ------------------------------------------------------------------------- Assets Current assets: Cash and cash equivalents $ 1,187,899 $ 1,005,181 Accounts receivable 17,518 27,654 Prepaid expenses, deposits and other 41,716 56,239 Inventory 20,181 26,048 Future income tax 1,396 2,560 ------------------------------------------------------------------------- 1,268,710 1,117,682 Property and equipment 2,226,685 2,307,566 Intangible assets 13,018 14,087 Other assets 54,431 54,367 ------------------------------------------------------------------------- $ 3,562,844 $ 3,493,702 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Liabilities and shareholders' equity Current liabilities: Accounts payable and accrued liabilities $ 303,583 $ 231,401 Advance ticket sales 308,022 286,361 Non-refundable guest credits 36,778 64,506 Current portion of long-term debt 183,681 171,223 Current portion of obligations under capital leases 108 744 ------------------------------------------------------------------------- 832,172 754,235 Long-term debt 863,496 1,048,554 Obligations under capital leases 3,249 3,358 Other liabilities 18,838 19,628 Future income tax 337,410 278,999 ------------------------------------------------------------------------- 2,055,165 2,104,774 Shareholders' equity: Share capital 647,637 633,075 Contributed surplus 62,534 71,503 Accumulated other comprehensive loss (10,470) (14,852) Retained earnings 807,978 699,202 ------------------------------------------------------------------------- 1,507,679 1,388,928 ------------------------------------------------------------------------- $ 3,562,844 $ 3,493,702 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Consolidated Statement of Cash Flows (Stated in thousands of Canadian dollars) (Unaudited) ------------------------------------------------------------------------- Three months ended Twelve months ended December 31 December 31 2010 2009 2010 2009 ------------------------------------------------------------------------- Operating activities: Net earnings $ 47,908 $ 20,175 $ 136,720 $ 98,178 Items not involving cash: Depreciation and amortization 32,686 36,836 132,894 141,303 Amortization of other liabilities (455) (5,846) (1,891) (7,595) Amortization of hedge settlements 351 350 1,400 1,400 Issuance of shares pursuant to employee share purchase plan - 3,835 - 11,071 (Gain) loss on derivatives (365) (3,426) 34 (2,406) (Gain) loss on disposal of property and equipment 97 331 (167) 1,504 Stock-based compensation expense 3,206 2,079 15,668 13,440 Income tax credit - - (1,667) (1,952) Future income tax expense 18,666 2,268 58,374 35,928 Unrealized foreign exchange loss 2,288 1,319 3,696 8,440 Change in non-cash working capital (34,459) 6,645 98,222 19,350 ------------------------------------------------------------------------- 69,923 64,566 443,283 318,661 ------------------------------------------------------------------------- Financing activities: Increase in long-term debt - 33,855 - 33,855 Repayment of long-term debt (42,769) (41,287) (171,115) (165,757) Decrease in obligations under capital leases (239) (112) (744) (406) Issuance of common shares - - 520 172,463 Share issue costs - (12) - (7,468) Shares repurchased (31,391) - (31,391) - Change in other assets 1,464 3,427 (2,947) 3,427 Change in non-cash working capital (7,147) (2,135) (4,526) (1,463) ------------------------------------------------------------------------- (80,082) (6,264) (210,203) 34,651 ------------------------------------------------------------------------- Investing activities: Aircraft additions (11,157) (10,264) (29,884) (118,659) Other property and equipment and intangible additions (6,611) (3,927) (18,675) (48,021) ------------------------------------------------------------------------- (17,768) (14,191) (48,559) (166,680) ------------------------------------------------------------------------- Cash flow from operating, financing and investing activities (27,927) 44,111 184,521 186,632 Effect of foreign exchange on cash and cash equivalents (2,237) (578) (1,803) (1,665) ------------------------------------------------------------------------- Net change in cash and cash equivalents (30,164) 43,533 182,718 184,967 Cash and cash equivalents, beginning of period 1,218,063 961,648 1,005,181 820,214 ------------------------------------------------------------------------- Cash and cash equivalents, end of period $ 1,187,899 $ 1,005,181 $ 1,187,899 $ 1,005,181 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Cash interest paid $ 14,516 $ 16,336 $ 61,280 $ 67,973 Cash taxes paid $ 591 $ 651 $ 2,958 $ 3,369 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Consolidated Statement of Shareholders' Equity (Stated in thousands of Canadian dollars) (Unaudited) ------------------------------------------------------------------------- Three months ended Twelve months ended December 31 December 31 2010 2009 2010 2009 ------------------------------------------------------------------------- Share capital: Balance, beginning of period $ 658,226 $ 628,740 $ 633,075 $ 452,885 Transfer of stock-based compensation expense on issued shares 6 509 24,637 2,130 Issuance of shares pursuant to stock option plans - - 520 - Shares repurchased (10,595) - (10,595) - Issued on public offering - - - 172,463 Share issue costs - (12) - (7,468) Tax effect of share issue costs - 3 - 1,994 Issuance of shares pursuant to employee share purchase plan - 3,835 - 11,071 ------------------------------------------------------------------------- 647,637 633,075 647,637 633,075 Contributed surplus: Balance, beginning of period 59,334 69,933 71,503 60,193 Stock-based compensation expense 3,206 2,079 15,668 13,440 Transfer of stock-based compensation expense on issued shares (6) (509) (24,637) (2,130) ------------------------------------------------------------------------- 62,534 71,503 62,534 71,503 Accumulated other comprehensive loss: Balance, beginning of period (9,149) (20,465) (14,852) (38,112) Other comprehensive income (loss) (1,321) 5,613 4,382 23,260 ------------------------------------------------------------------------- (10,470) (14,852) (10,470) (14,852) Retained earnings: Balance, beginning of period 788,014 679,027 699,202 611,171 Change in accounting policy - - - (10,147) Net earnings 47,908 20,175 136,720 98,178 Shares repurchased (20,796) - (20,796) - Dividends declared (7,148) - (7,148) - ------------------------------------------------------------------------- 807,978 699,202 807,978 699,202 Total accumulated other comprehensive loss and retained earnings 797,508 684,350 797,508 684,350 ------------------------------------------------------------------------- Total shareholders' equity $ 1,507,679 $ 1,388,928 $ 1,507,679 $ 1,388,928 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Consolidated Statement of Comprehensive Income (Stated in thousands of Canadian dollars) (Unaudited) ------------------------------------------------------------------------- Three months ended Twelve months ended December 31 December 31 2010 2009 2010 2009 ------------------------------------------------------------------------- Net earnings $ 47,908 $ 20,175 $ 136,720 $ 98,178 Other comprehensive income (loss), net of tax: Amortization of hedge settlements to aircraft leasing 351 350 1,400 1,400 Net unrealized loss on foreign exchange derivatives under cash flow hedge accounting(i) (3,372) (617) (3,460) (911) Reclassification of net realized (gain) loss on foreign exchange derivatives to net earnings(ii) 311 - 1,557 (3,977) Net unrealized gain (loss) on fuel derivatives under cash flow hedge accounting(iii) 292 3,266 (1,778) 6,709 Reclassification of net realized loss on fuel derivatives to net earnings(iv) 1,097 2,614 6,663 20,039 ------------------------------------------------------------------------- (1,321) 5,613 4,382 23,260 ------------------------------------------------------------------------- Total comprehensive income $ 46,587 $ 25,788 $ 141,102 $ 121,438 ------------------------------------------------------------------------- ------------------------------------------------------------------------- (i) Net of income taxes of $1,195 and $1,224 (2009 - $230 and $447) (ii) Net of income taxes of ($117) and ($586) (2009 - $nil and $1,576) (iii) Net of income taxes of ($109) and $670 (2009 - ($1,353) and ($2,878)) (iv) Net of income taxes of ($414) and ($2,509) (2009 - ($1,093) and ($8,372)) Operating highlights (Unaudited) ------------------------------------------------------------------------- Three months ended December 31 2010 2009 Change ------------------------------------------------------------------------- ASMs 5,021,010,134 4,412,573,833 13.8% RPMs 3,941,660,897 3,460,905,058 13.9% Load factor 78.5% 78.4% 0.1 pts. Yield (cents) 17.58 16.47 6.7% RASM (cents) 13.80 12.92 6.8% CASM (cents) 12.23 12.10 1.1% CASM, excluding fuel and employee profit share (cents) 8.51 8.67 (1.8%) Fuel consumption (litres) 242,620,920 216,871,585 11.9% Fuel costs per litre (dollars) 0.74 0.69 7.2% Segment guests 3,803,550 3,515,168 8.2% Average stage length (miles) 982 923 6.4% Utilization (hours) 11.7 11.4 2.6% Number of full-time equivalent employees at period end 6,877 6,291 9.3% Fleet size at period end 91 86 5.8% ------------------------------------------------------------------------- ------------------------------------------------------------------------- Twelve months ended December 31 2010 2009 Change ------------------------------------------------------------------------- ASMs 19,535,291,313 17,587,640,902 11.1% RPMs 15,613,121,610 13,834,761,211 12.9% Load factor 79.9% 78.7% 1.2 pts. Yield (cents) 16.71 16.49 1.3% RASM (cents) 13.36 12.97 3.0% CASM (cents) 12.09 11.77 2.7% CASM, excluding fuel and employee profit share (cents) 8.52 8.45 0.8% Fuel consumption (litres) 950,341,292 859,115,698 10.6% Fuel costs per litre (dollars) 0.71 0.66 7.6% Segment guests 15,173,581 14,038,827 8.1% Average stage length (miles) 968 923 4.9% Utilization (hours) 11.6 11.7 (0.9%) Number of full-time equivalent employees at period end 6,877 6,291 9.3% Fleet size at period end 91 86 5.8% -------------------------------------------------------------------------

Reconciliation of non-GAAP measures to GAAP

To supplement the consolidated financial statements presented in accordance with Canadian GAAP, WestJet uses various non-GAAP performance measures. These measures are provided to enhance the reader's overall understanding of WestJet's current financial performance and are included to provide investors and management with an alternative method for assessing the operating results in a manner that is focused on the performance of ongoing operations and to provide a more consistent basis for comparison between quarters. These measures are not in accordance with, or an alternative to, Canadian GAAP and do not have standardized meanings. Therefore, they are not likely to be comparable to similar measures presented by other entities.

Net earnings and diluted earnings per share excluding special items

(Stated in thousands of Canadian dollars, except per share amounts)

(Unaudited)

WestJet believes excluding special items is useful for investors to evaluate its recurring operational performance.

------------------------------------------------------------------------- Three months ended Twelve months ended December 31 December 31 2010 2009 2010 2009 ------------------------------------------------------------------------- Net earnings - GAAP $ 47,908 $ 20,175 $ 136,720 $ 98,178 Adjusted for: CEO departure (net of tax) - - 3,700 - Income tax rate reductions and estimate change - (5,051) 2,372 (5,051) ------------------------------------------------------------------------- Net earnings excluding special items - non-GAAP $ 47,908 $ 15,124 $ 142,792 $ 93,127 ------------------------------------------------------------------------- Diluted earnings per share excluding special items - non-GAAP $ 0.33 $ 0.11 $ 0.98 $ 0.71 ------------------------------------------------------------------------- -------------------------------------------------------------------------

CASM, excluding fuel and employee profit share

(Stated in thousands of Canadian dollars, except per unit amounts)

(Unaudited)

WestJet excludes the effects of aircraft fuel expense and employee profit share expense to assess the operating performance of the business. Fuel expense is excluded from operating results due to the fact that fuel prices are impacted by a host of factors outside WestJet's control, such as significant weather events, geopolitical tensions, refinery capacity and global demand and supply. Excluding this expense allows WestJet to analyze its operating results on a comparable basis. Employee profit share expense is excluded from operating results due to its variable nature and excluding this expense allows greater comparability.

------------------------------------------------------------------------- Three months ended Twelve months ended December 31 December 31 2010 2009 2010 2009 ------------------------------------------------------------------------- Operating expenses - GAAP $ 614,011 $ 533,938 $ 2,361,716 $ 2,070,564 Adjusted for: Aircraft fuel expense (179,276) (148,853) (674,608) (570,569) Employee profit share expense (7,442) (2,297) (22,222) (14,675) ------------------------------------------------------------------------- Operating expenses, excluding above items - non-GAAP $ 427,293 $ 382,788 $ 1,664,886 $ 1,485,320 ASMs (in thousands) 5,021,010 4,412,574 19,535,291 17,587,641 ------------------------------------------------------------------------- CASM, excluding above items - non-GAAP (cents) 8.51 8.67 8.52 8.45 ------------------------------------------------------------------------- -------------------------------------------------------------------------

SOURCE WestJet