WestJet Announces Its Fifth Consecutive Quarter of Record Profit With Net Earnings of $29.9 Million
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Westjet
WestJet (TSX:WJA) today announced its first quarter 2007 financial results. The airline reported record first quarter net earnings of $29.9 million compared to $12.9 million in the same period of 2006, an increase of 132 per cent. Diluted earnings per share of 23 cents for the quarter were up from 10 cents in 2006.
Sean Durfy, WestJet's President said today, "Our first quarter results reflect WestJet's ability to deliver three key elements crucial for success: more guests are flying with us, revenue is increasing and costs have been controlled; all while growing our capacity a significant 19 per cent. Our strategic decision making, brand strength and exceptional guest experience, delivered by our dedicated team of WestJetters, makes us one of the most profitable airlines in North America."
First quarter revenue rose to $479.2 million, compared to $386.7 million in the first quarter of 2006, an improvement of 23.9 per cent. Ancillary revenues, which include buy-on-board, headsets, fees, liquor sales and non-fare revenues from WestJet Vacations increased to $22.7 million, 66 per cent higher than in the first quarter 2006.
Capacity, measured in ASM (available seat miles), for the first quarter 2007 rose to 3.4 billion from 2.9 billion in 2006, an increase of 19.1 per cent. Load factor for the quarter ending March 31, 2007 was 81.1 per cent, compared to 79.4 per cent in 2006, with each of the first three months of 2007 producing record-breaking load factors.
The airline flew 2.8 billion RPMs (revenue passenger miles) in the first quarter 2007, compared to 2.3 billion in the same period 2006, an increase of 21.6 per cent. RASM (revenue per available seat mile) for the first quarter 2007 was 13.9 cents, compared to 13.3 cents in the same period in 2006, an increase of 4.2 per cent. Yield, measured as revenue per RPM, was 17.1 cents per passenger mile, compared to 16.8 cents in the same period 2006.
A continued focus on cost management resulted in a first quarter CASM (cost per available seat mile) of 12.3 cents, a slight year-over-year reduction of almost one per cent. Excluding fuel, the airline's CASM in the first quarter of 2007 remained flat at 9.1 cents, compared to the same period in 2006.
Sean Durfy continued, "Our seasonal capacity deployment strategy hit stride, putting us in a unique position within the North American airline industry to deploy a portion of our winter capacity to southern sun spots and then return this inventory to Canada in the peak summer months. RASM increased 4.2 per cent on our total service, an impressive achievement given our 19 per cent capacity increase in the quarter.
"Our commitment to providing exceptional service is winning over guests as we now claim close to 35 per cent of the domestic market. We continue to make inroads into the business and corporate segments which now account for 45 per cent of our guests. We recently signed Wal-Mart Canada to our growing list of corporate accounts.
"This quarter was highlighted by our record earnings performance, our careful management of expenses and our ability to attract an increasing number of guests. We ended the quarter with a strong balance sheet and operating cash flow, and conservative debt-to-equity ratios of 2.4 to 1.
"With the escalating cost of office space in the Calgary market, our Board of Directors approved an estimated $90 million new office facility to be located adjacent to WestJet's existing Hangar. Our research shows that we will achieve efficiencies in space utilization and operating costs simply by consolidating our office space from seven buildings down to one large campus.
"In the second quarter we will add 16 per cent more capacity compared to the second quarter 2006. We see several opportunities for continued profitable growth in Canada. Our strong brand awareness combined with our guest satisfaction results indicate that over 90 per cent of our guests will fly with us again. This positions us well to gain increasing market share and further penetrate and stimulate markets within Canada. We are pleased with our early bookings into Saint John, Kitchener-Waterloo and Deer Lake, all to be launched on May 14th. Moreover, we have a strong team of WestJetters who are committed to our guests and to each other. With their dedication and caring nature, we remain confident in our ability to continue our profitable growth throughout the remainder of 2007."
The airline reported first quarter on-time performance of 75.2 per cent, compared to 64.8 per cent in the first quarter of 2006, a year-over-year improvement of 10.4 points. WestJet's completion rate for the quarter was 98.4 per cent compared to 99.0 per cent in the first quarter 2006.
WestJet successfully completed an upgrade to its Open Skies reservation system. This upgrade is being implemented in two phases. The first phase was successfully completed on April 29th, 2007, which comprised of a migration to the supported version as well as infrastructure enhancements. Work has now begun on phase two of the upgrade which will deliver enhancements to WestJet's global distribution system and web environments.
Date posted: 02-May-07.
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WestJet Announces Its Fifth Consecutive Quarter of Record Profit With Net Earnings of $29.9 Million 
