WestJet reports record net profit in Q1

Washington DC
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WestJet reported record net earnings of Canadian dollar ($C) $91.1 million ($90.64 million), up 33.3% from C$68.3 million in the same three months of 2012.

Operating income was also up to C$132 million this quarter from nearly C$106 million in the same period last year.

"We are very pleased to report our best ever quarterly earnings and for the third consecutive quarter we exceeded our 12% ROIC (return on invested capital) target by achieving 14.3%," said WestJet president and chief executive Gregg Saretsky.

Revenues totalled C$967 million in the first quarter, up 8.6% from the first quarter of 2012.

WestJet's capacity increased 6% between the first quarter of 2012 and the first three months of 2013, driven primarily by transcontinental traffic. The carrier's load factor was 84.3% in the first quarter, up 1.3 percentage points.

Revenue per available seat mile was 16.03 Canadian cents, up 2.4% from the same three months of 2012. Cost per available seat mile (CASM) was 13.84 Canadian cents, up slightly from 13.8 cents in the first quarter of 2012. Excluding fuel and employee profit sharing, CASM was 8.94 cents.

Yields increased 0.7% to 19.01 Canadian cents from 18.87 cents in the first quarter of 2012.

WestJet is expecting to see $30 million in annual savings after it finishes rolling out a programme to place fewer flight attendants per passenger, via an exemption from Transport Canada announced yesterday. The carrier expects it will start using this new ratio of one flight attendant per 50 seats starting in the third quarter, which requires less inflight personnel than the 1:40 ratio it is required to provide now.

The carrier is also progressing with its three-year goal to reduce annual costs by C$100 million by 2015, and executives told investors on a 7 May conference call that this number is only a starting point for annual savings it could reach in the future. The carrier is focusing on the areas of aircraft, asset utilisation, distribution, productivity and all non-operational expenses.