CanadaEH
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Westjet Posts $21.1M Profit

Thu Oct 28, 2004 8:56 am

CALGARY, ALBERTA--(CCNMatthews - Oct. 27, 2004) - WestJet today announced its 2004 third quarter results with net earnings of $21.1 million compared to $32.3 million achieved during the same period last year. In the first nine months of 2004, the airline achieved net earnings of $29.1 million compared to $47.8 million during the first nine months of 2003.

Operating revenue increased this quarter to $310.3 million from $254.8 million attained in the third quarter last year. Year to date, operating revenue grew to $784.3 million, an increase from $633.4 million during the same period in 2003.

WestJet reported diluted earnings per share of $0.17 during the third quarter of 2004, compared with $0.28 during the third quarter of 2003. Year to date, the airline reported diluted earnings per share of $0.23 compared to $0.42 during the same nine-month period in 2003. The number of common shares outstanding increased to 125,447,836 at the quarter's end compared to 114,180,078 on September 30, 2003, largely due to a $150.0 million equity issue in October 2003.

WestJet's capacity, measured in available seat miles (ASMs), grew this quarter by 26.9% to 2.41 billion from last year's 1.90 billion ASMs. Year to date, ASMs increased 30.0% to 6.47 billion from 4.98 billion ASMs during the first nine months of 2003. Revenue passenger miles (RPMs) increased 27.3% to 1.85 billion RPMs this quarter, up from 1.45 billion RPMs in the same quarter last year. For the first nine months of 2004, RPMs increased 30.5% to 4.60 billion RPMs from 3.52 billion RPMs during the first three quarters of 2003.

WestJet's load factor for the quarter was 76.6% compared with 76.4% in the third quarter of 2003, while the airline's year-to-date load factor was 71.0% compared with 70.7% during the first nine months of 2003.

Yield (revenue per revenue passenger mile) decreased 4.0% this quarter to 16.8 cents from 17.5 cents during third quarter 2003. Year to date, yield is down 5.0% to 17.1 cents from 18.0 cents during the first nine months of 2003. WestJet's average stage length increased 16.0% from 679.4 miles in the third quarter of 2003 to 788.0 miles this quarter.


More at: http://www.globeinvestor.com/servlet/WireFeedRedirect?cf=GlobeInvestor/config&vg=BigAdVariableGenerator&date=20041027&archive=ccnm&slug=1027029n
EH.
 
Jean Leloup
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RE: Westjet Posts $21.1M Profit

Thu Oct 28, 2004 9:01 am

Given the trend compared to last year, I think it's quite possible that the next quarter might end the streak of profitability, and the one after it would likely be worse. However, it depends on the rate of capacity change (14 planes coming in the next year, but I don't know when, exactly), as well as how successful these new US routes are.
Next flight.... who knows.
 
sebring
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RE: Westjet Posts $21.1M Profit

Thu Oct 28, 2004 9:08 am

WJ announced today it is cancelling YYZ-LAX on Dec. 22
 
RP TPA
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RE: Westjet Posts $21.1M Profit

Thu Oct 28, 2004 9:52 am

Sebring...

Where did you see or hear that announcement? I didnt see anything on the Westjet website.
 
LAXintl
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RE: Westjet Posts $21.1M Profit

Thu Oct 28, 2004 10:03 am

Actually I believe LAX-YYZ service ends on 12/19. Daily LAX-YVR and LAX-YYC service remains.
From the desert to the sea, to all of Southern California
 
CanadaEH
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RE: Westjet Posts $21.1M Profit

Thu Oct 28, 2004 10:12 am

Given the trend compared to last year, I think it's quite possible that the next quarter might end the streak of profitability, and the one after it would likely be worse. However, it depends on the rate of capacity change (14 planes coming in the next year, but I don't know when, exactly), as well as how successful these new US routes are.

Given the trends, I can't disagree with you. However, I don't think the potential for a quarterly loss exists until Q12005. We are adding just one, maybe two more aircraft this year with another 15 coming in 2005. I know that the -800's are coming in April, May, and June, and I think the -600's come in the same time period (three, if I'm not mistaken).

However, our transborder routes (with the exception of YYZLAX, obviously) are doing very well. You might see additional frequencies or new city pairs open up to our current destinations should the demand prove to be there. Our charter operations don't go full-blown until about mid-December, so the true impact they have on our operation won't be truly felt until Q12004.

With Jetsgo also adding domestic capacity, one has to wonder how big of an impact they will have on Westjet's revenue domestically. With the growth of both Westjet and Jetsgo (and Canjet to a lesser extent), the domestic market is quickly going to become flooded with seats and yields are going to decline to a point where the "weakest link" won't be able to survive. The sad reality is that the market cannot support all the capacity that is being throwin into the market, it just can't.

Should capacity become an issue, Westjet could have the option of parking its -200's since most (if not all?) are owned. It has been said that Harmony will shut down operations by 2005 if it isn't making money, so if that's the case, Hawaii would be losing a significant amount of flights (9x weekly flights from YVR if I'm not mistaken). Westjet could quickly launch service and redeploy capacity into the Hawaii market providing some breathing room, as long as we are ETOP certified by that point in time.

As bad as it is to say, one if not more airlines will not survive the winter. While more airlines = more choices (and more planes to spot for some of you), the reality is that if a market cannot support them, they die. Until that becomes a reality, Westjet (and WJA shares) are in for a bumpy, bumpy ride.
EH.
 
727200er
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RE: Westjet Posts $21.1M Profit

Thu Oct 28, 2004 4:23 pm

Rumours have circulated that Jetsgo is actually in financial trouble. I know we hear this all the time however the source was what I would call reliable. It seems that, monies were promised for expansion when AC were in the darkest point of CCRA, however with AC back out, and having a new business plan, the investors have backed away. NONE OF THIS IS CONFIRMED lol. I would however suggest that Jetsgo is probably in the weakest financial shape of the bigger carriers. It should at least be interesting to watch.

I'm rooting for WestJet the little airline that could.
"they who dream by day are cognizant of many things which escape those who dream only at night" - Edgar Allen Poe
 
Cessnapimp
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RE: Westjet Posts $21.1M Profit

Fri Oct 29, 2004 1:24 am


Wow, I did not know that WJ was going to get the 800's and 600's so soon. There can't be too many carriers out there that operate 3 variants of the NG. Best of luck to WJ, I'm sure they'll do fine this winter. As for jetsgo, haven't seen any signs that they are stuggling right now.
 
FLYACYYZ
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RE: Westjet Posts $21.1M Profit

Fri Oct 29, 2004 4:53 am

How has YYZ fared for Westjet since the move from YHM? The following observation is in no way wishful thinking, as I respect WS for who they are and what they do.

On a typical day upon arriving at T-2 for work, I park at the west end of the terminal and make my way to the east end. Since moving operations to T-2, I have never seen more than perhaps 12 customers checking in at domestic, perhaps 3-4 at YUL/YOW, and have yet to see a single soul at their transborder U.S. check-in. I've made this observation at various hours of the day. There seems to be an abundance of staff, but where are all of the customers??

Above and Beyond
 
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PanAm_DC10
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RE: Westjet Posts $21.1M Profit

Fri Oct 29, 2004 5:53 am

CanadaEH

Thank you for the update on the 73G deliveries for 2005.

The original 736 order was announced in August and was for 6 firm. Since then I saw a report (late Sept based on a Financial Filing) that they had ordered an additional 736 (total 7 firm) and accelerated delivery of 3 other 73G's for 2005. I assume the single 736 order needs loan approval like the initial order.

Is this true and are those 3 accelerated deliveries included in the 15 you mentioned? Any clarification would be appreciated.

Regards
Ask the impossible to achieve the best possible
 
CanadaEH
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RE: Westjet Posts $21.1M Profit

Fri Oct 29, 2004 11:37 am

How has YYZ fared for Westjet since the move from YHM? The following observation is in no way wishful thinking, as I respect WS for who they are and what they do.

On a typical day upon arriving at T-2 for work, I park at the west end of the terminal and make my way to the east end. Since moving operations to T-2, I have never seen more than perhaps 12 customers checking in at domestic, perhaps 3-4 at YUL/YOW, and have yet to see a single soul at their transborder U.S. check-in. I've made this observation at various hours of the day. There seems to be an abundance of staff, but where are all of the customers??


We had a very, very busy summer out of YYZ. However, with winter and the typically slower season approaching, there has been a slowdown since probably Thanksgiving. Is it normal? I'd say so, but I'd also say that with all the competition that YYZ now has (Jetsgo, Air Canada, Canjet, and Westjet) that loads are probably lower than they should be or traditionally would have been. As for your observation on little or no customers checking in, you're not the only one to say that but I can tell you that the loads show that people are flying... so...  Smile Our transborder routes, with the exception of LAX have been awesome, and so have the flights out of YYC. Good selection of destinations IMO.

PANAM_DC10: We are to have 15 aircraft delivered in 2005 - 3 -600, 7 -700, and 5 -800. In 2006, I believe that we are to have 3 -600 and 1 -700 delivered as of today. I'd expect more announcements regarding orders if/when a decision is made to park out -200 fleet.
EH.
 
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yyz717
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RE: Westjet Posts $21.1M Profit

Fri Oct 29, 2004 12:06 pm

As for your observation on little or no customers checking in, you're not the only one to say that but I can tell you that the loads show that people are flying... so...

Seriously, perhaps WJ is simply very efficient at processing passengers through check-in.

True customer service should endeavour to have no line up -- ever. It means the passengers are processed immediately. Lengthy check-in lines are not indicative of high load factors -- they are indicative of poor customer service.

I dumped at the gybe mark in strong winds when I looked up at a Porter Q400 on finals. Can't stop spotting.
 
WJA73G
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RE: Westjet Posts $21.1M Profit

Fri Oct 29, 2004 1:14 pm

Apparently the YYZ loads are doing quite well, My Dad left YYZ on Monday with 117/136.

WJA73G
 
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PanAm_DC10
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RE: Westjet Posts $21.1M Profit

Fri Oct 29, 2004 11:14 pm

CanadaEH

Thanks very much. I have actually found the report I was talking about and it was from October 6th. Below is an extract. They have accelerated 3 736 and exercised their 1st option. It isn't listed on Boeing's site yet though will be soon.

WESTJET AIRLINES LTD ("WJA-T")
- Converts 737-600 Purchase Option into Firm Delivery, Accelerates
- Delivery of Three 737-600s

WestJet announced its Board of Directors has approved the purchase of
one additional Boeing Next-Generation 737 aircraft by converting the first
of 12 purchase options with Boeing into a firm delivery. The aircraft is
scheduled to be delivered in January 2006.
WestJet also announced that it is accelerating delivery in 2006 on
three previously-announced Next-Generation 737-600s by four months. These
aircraft will now be delivered in March, April and May of 2006.

So 6 736 ordered, accelerated delivery and options being converted. Good news for Westjet

Regards

Ask the impossible to achieve the best possible
 
Dash8King
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RE: Westjet Posts $21.1M Profit

Sat Oct 30, 2004 3:32 am

Yeah I can see them losing next QTR as their profit was less then a million last year for 4th QTR and last year and they had made more during the 3rd then they did now.
 
Samurai 777
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RE: Westjet Posts $21.1M Profit

Sat Oct 30, 2004 3:48 am

The acceleration of the 736 deliveries might mean that at least a few of the 732s have already failed or are failing maintenance checks by now. Which, of course would lead to an acceleration of the 732 fleet retirement. I do not know if there's already an increase in mech delays involving 737-200s, but it might be surprising if that's also the case.

I'd also be very surprised if any of the WS's 732s remain in service after the end of 2006 - or probably even earlier. It's not only the aging airframes, but also the rising oil and fuel prices too.
 
CanadaEH
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RE: Westjet Posts $21.1M Profit

Sat Oct 30, 2004 4:15 am

The acceleration of the 736 deliveries might mean that at least a few of the 732s have already failed or are failing maintenance checks by now. Which, of course would lead to an acceleration of the 732 fleet retirement. I do not know if there's already an increase in mech delays involving 737-200s, but it might be surprising if that's also the case.

Failed or failing maintenance checks??? Our 737-200's have been going through their C-Checks just as they have been for 8 years. If you are suggesting that safety is becoming an issue I seriously challenge your statement.
EH.
 
Samurai 777
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RE: Westjet Posts $21.1M Profit

Sat Oct 30, 2004 4:30 am

Failed or failing maintenance checks??? Our 737-200's have been going through their C-Checks just as they have been for 8 years. If you are suggesting that safety is becoming an issue I seriously challenge your statement.

Hey, don't shoot the messenger!

Number one - I am not implying, and nor have I implied, that the 732s are unsafe in any way.

Number two - I didn't pull this out of the blue. What I said about the 732s failing maintenance checks is from a source that which I will not reveal.

But I do apologize if the maintenance check failures prove unfounded.

[Edited 2004-10-29 21:39:53]
 
yukimizake
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RE: Westjet Posts $21.1M Profit

Sat Oct 30, 2004 6:30 am

A few months ago I remember reading about how some industry analysts questioned Westjet's accounting practices regarding the amortization of maintenace costs, specifically the fact that they are not amortizing the costs of D checks (an expense of roughly $2 to $3 million every 5 to 7 years).

Is this still an outstanding issue? An if so how much would it impact Westjet's bottom line?


'Opfer müssen gebracht werden (Sacrifices must be made)' - Otto Lilienthal
 
chock head
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RE: Westjet Posts $21.1M Profit

Sat Oct 30, 2004 8:01 am

The mx plan for the 700 series is different in that it is a rolling check isnstead of having to do a full "D" check, the plane gets elements of the "D" check as it goes.

That means the cost of the full "D" check does not have the same impact on the bottom line.

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