The high costs at YYZ
are not to blame. Between the time that we announced our move to YYZ
and just before we actually DID move, booking slowed, especially in the weeks leading up to it. That is what contributed to some of the costs - the move to YYZ
and the booking surrounding it.
Also, costs/expenses which affected profitability:
-As a result, in the first quarter of 2004,
WestJet incurred a non-cash expense of $2.5 million related to stock
-In the first quarter of 2004, WestJet implemented a series of schedule
changes in both eastern and western Canada that in the short term
created a decline in revenues per revenue passenger mile. Schedule
changes, particularly of the magnitude implemented, create a dip in
revenues because bookings decline on the affected flights as the
changeover date approaches, while increases in bookings on the newly
created flights only gather momentum once the flights have commenced. In
order to help overcome this erosion of revenue during this period,
WestJet pursued a policy of deeper discounting through seat sales which
contributed to lower yields and revenues during the quarter.
-"We took advantage of this period, the weakest quarter of the year,
to reconfigure the cabins and to add blended winglets to our
Next-Generation aircraft. These initiatives to improve fuel efficiency
and to increase legroom for our guests were completed on March 19. The
practical timing of these improvements from an operational perspective
meant negligible disruption to our schedule but did keep three aircraft
out of revenue service on a rotating basis for the duration of the
quarter. The impact that this had on our earnings through reduced
revenues and increased costs was not insignificant. However, we are
confident that this investment will pay off significantly in the future.
Much like this period last year, a not-so-great Q1 was followed by two great quarters. One can only look ahead to the future, when initiatives such as winglets, LiveTV, and inproved legroom will really start to pay off.
And one can't forget the fact that we'll be getting some -800's..