WestJet revises CASM guidance to reflect expected cost savings

Washington DC
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WestJet has revised its cost per available seat mile (CASM) guidance for 2013 to be flat or up 1% versus a 2%-3% increase previously expected during a fourth quarter earnings forecast in February, the carrier says on an earnings call today with investors.

CASM for the first quarter was also down from expectations. The carrier recorded a CASM of 8.94 Canadian cents (8.9 cents) excluding fuel and profit sharing in the first quarter, up only 0.3% from the first quarter of 2012 instead of the projected 2%-3% increase for the quarter.

WestJet says it has revised this guidance based on cost reductions it has realised and plans to see from a programme that targets $100 million in annual cost savings by the end of 2015.

WestJet expects a moderate decline in revenue per available seat mile (RASM) for the second quarter. It expects its fuel cost per litre to be in the range of 84 to 86 Canadian cents, or a year-over-year decrease of 6%-9% from 2012.

The carrier sees capital expenditures totalling between C$165 and C$175 million in the second quarter. It now expects to incur more expenses this year due to deposits it has paid under an agreement to purchase 10 new Boeing 737-800 aircraft from Boeing announced today. It now forecasts spending C$610 to C$630 million for the full year, up from a previously forecasted C$430 to C$450 million.