WestJet ended the third quarter to 30 September with cash and cash equivalents of C$1.2 billion ($1.1 billion), compared with C$1 billion as at 31 December.
In an earnings release, the airline announced it will utilise its strong cash position to initiate a new quarterly dividend of five cents a share and launch a new share buyback program. The quarterly dividend will be paid for the first time on 21 January, 2011, to shareholders of record as of 15 December, 2010.
WestJet also plans to buy back approximately 5% of its outstanding shares for cancellation, or roughly 7.3 million shares, by 5 November, 2011.
The airline says its third quarter cash on hand totals 3.77 times the amount of its advance ticket sales balance, compared with 2.51 times at 31 December. Cash and cash equivalents were approximately 49% of its trailing 12 months of revenues and the current ratio was 1.50 at the end of the third quarter.
WestJet has available a revolving operating line of credit with a syndicate of three Canadian banks that bears interest at prime plus 0.50% per annum, or a bankers acceptance rate at 2% annual stamping fee or equivalent, and is available for general corporate expenditures and working capital purposes.
As at 30 September, WestJet is committed to lease an additional four Boeing 737-700 aircraft and three 737-800 aircraft for terms ranging between eight and 10 years in US dollars.
Source: Commercial Aviation Online
