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.