WestJet earns $178.13-million in 2008

2009-02-11 09:28 ET - News Release

Mr. Sean Durfy reports

WESTJET ANNOUNCES FOURTH QUARTER AND YEAR-END RESULTS

WestJet Airlines Ltd. has released its fourth quarter and year-end financial results for 2008. The airline reported fourth quarter net earnings of $40.8 million, or 32 cents per diluted share, and full-year net earnings of $178.1 million, or $1.37 per diluted share.

"We are very pleased with our quarterly results that cap off a financially successful year," commented Sean Durfy, WestJet President and CEO. "This was a challenging time for all businesses. The strain of economic uncertainty, fluctuations in oil prices and financial turmoil continue to impact all industries. While the unpredictable nature of 2008 challenged our airline, our continued ability to deliver on our business strategy, conservative approach to maintaining a healthy balance sheet and our team of caring and dedicated WestJetters allowed us to once again be a top performer in the industry worldwide."

WestJet reported a fourth quarter earnings before tax (EBT) margin of 9.5 per cent. For the full-year 2008, the airline had an EBT margin of 10.0 per cent and an operating margin of 11.5 per cent.

"In comparison to those North American airlines who have reported their numbers, our pre-tax margin is once again among the best," commented Sean Durfy. "We weathered the volatility in the financial and credit markets and ended the year with a cash position of over $820 million."

Sean Durfy continued, "We are pleased to see RASM increase for the year given a 17 per cent increase in revenue passenger miles. Due to a general weakening of economic conditions that were broadly felt across all industries in the latter half of the year, we did experience a slight decline in RASM in the fourth quarter."

CASM, excluding fuel and employee profit share, declined for the full-year 2008 despite an increase in the quarter. The increase in fourth quarter CASM, excluding fuel and profit share, was impacted by weather-related expenses associated with de-icing and re-accommodating guests.

"Our renowned WestJet culture was exemplified by the wonderful manner in which our WestJetters dealt with the severe weather situation across Canada this Christmas," commented Sean Durfy. "We demonstrated the uniqueness of our airline by going above and beyond to take care of guests when weather disrupted their holiday travel plans."

"Our ability to adjust our network to meet the demands of our guests continues to play an important role in our financial success," added Sean Durfy. "The flexibility of our fleet allows us to respond quickly to favourable market opportunities ensuring that we maximize the efficiency and profitability of our network. With our recently announced plans to start service to Sydney, Nova Scotia; Yellowknife; San Diego and San Francisco, we continue to work towards optimizing the use of our fleet and developing new destinations."

WestJet plans to continue its growth in 2009. Aircraft delivery delays, resulting from last year's Boeing strike, have slowed the airline's ASM growth expectations to between six and seven per cent in the first quarter of 2009, and approximately five per cent for the full year.

"It is too early for us to accurately comment on first quarter traffic and revenues; however, based on current booking and revenue trends, and taking into consideration that Easter is in April this year versus March last year, we are seeing downward pressure on our yields. This is contributing to an expected decline in year-over-year RASM for the first quarter of 2009," explained Sean Durfy. "Building on the record year WestJet Vacations had in 2008, we are looking forward to a strong first quarter for our vacations' bookings.

"The accomplishments of our people resulted in a successful 2008 despite a difficult year for aviation. Our low-cost focus along with the dedication of our more than 7,400 WestJetters will see us continue our growth; 2009 should be another successful and profitable year for WestJet."

WestJet's continued growth in 2009 is focused on developing the capabilities, technology and resources to allow code-sharing with other airlines, beginning with Southwest Airlines by the end of 2009 and Air France and KLM by early 2010. Code-sharing is an important part of WestJet's strategy to increase network flow, bringing additional travellers to its network and offering additional access for new destinations.

Additionally, WestJet plans to implement a new loyalty and credit card program to further engage guests by creating products that are lucrative for flyers, easy to use and will benefit both frequent flyers and those guests who are new to WestJet. WestJet's underlying fundamentals include its continued strong profitability, a healthy cash position, an enviable corporate culture and an award-winning guest experience.

WestJet also reported fourth quarter and year-end 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.

Conference call

WestJet will hold a live analysts' conference call today at 9 a.m. MT (11 a.m. ET). Sean Durfy, President and CEO, and Vito Culmone, Executive Vice-President of Finance and CFO, will discuss WestJet's fourth quarter and year-end 2008 results and answer questions from financial analysts. The conference call is available through the toll-free telephone number 1-800-731-5319. Participants are encouraged to join the call 10 minutes prior to the scheduled start time at 8:50 a.m. MT (10:50 a.m. ET). The call can also be heard live through an Internet webcast in the Investor Relations section of westjet.com.

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