WestJet Reports First Quarter Net Earnings of $13.8 Million

May 4, 2010
The airline achieved its 20th consecutive quarter of positive earnings.

CALGARY , May 4 /PRNewswire-FirstCall/ - WestJet (TSX:WJA) today reported first quarter 2010 net earnings of $13.8 million, or 10 cents per diluted share, which marks its 20th consecutive quarter of profitability. Excluding the impact of a one-time special item related to the departure of WestJet's CEO in the first quarter of 2010, WestJet's adjusted first quarter net earnings for 2010 were $17.5 million or 12 cents per diluted share.

"We are very pleased to be starting 2010 with another quarter of profitability," said WestJet President and CEO Gregg Saretsky , "especially in light of the challenging economic environment and rising energy costs. Our talented and dedicated team of WestJetters and a disciplined approach to running a low-cost business have produced first quarter results that continue to be among the best in North America based on normalized earnings before tax margins."

With regard to the airline's first quarter operational highlights, Gregg Saretsky commented, "We are happy to have achieved a seven per cent year-over-year improvement in revenue, notwithstanding a 2.4 per cent decline in yield. Our yield continued to be under pressure from price-sensitive travellers, which resulted in a RASM decline of 0.8 per cent."

Indications that stronger load factor and improving yield trends are starting to emerge - and assuming this trend remains - the airline expects to see year-over-year RASM gains in the second quarter of 2010.

A 3.9 per cent increase in CASM, contributed to the company's first quarter profit declining from the profit recorded in the first quarter of 2009. CASM increases were primarily due to higher sales and distribution costs and elevated fuel prices. Significant WestJet Vacations' revenue growth and the associated commissions on sales during the quarter were the main drivers behind the increased sales and distribution expense. Based on current cost trends, WestJet anticipates second quarter 2010 CASM, excluding fuel and employee profit share, to increase less than 2.5 per cent year-over-year compared to the 4.9 per cent year-over-year increase seen in the first quarter.

WestJet's capacity growth of 7.9 per cent for the first quarter was driven exclusively by expansion in the airline's southern markets. WestJet Vacations' continued growth helped support the airline's performance in its southern markets and positively contributed to the bottom line. The airline's capacity for the second quarter is expected to increase 10 per cent. Its full-year capacity is expected to increase nine to 10 per cent with the majority of the additional capacity going to southern destinations.

"WestJet's focus for 2010 will be to leverage the investments we made in technology and capabilities throughout 2009," said Gregg Saretsky . "Our priorities are to drive cost efficiencies and to tap into new sources of revenue now that we have our long-term reservation system in place, while utilizing our capacity to drive profitability, including airline partnerships and new ancillary revenues from our recently launched Frequent Guest Program and our WestJet RBC MasterCard program."


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