WestJet Airlines faces capacity pressure as it still continues to record solid financial results

Canada's WestJet is preparing to face some pressure from competitive capacity increases in CY2015 as rival Air Canada ratchets up its supply through the expansion of its low cost unit rouge and aircraft upgauging.

At the same time WestJet is facing cost pressure in CY2015 as the shorter stage lengths performed by its regional subsidiary Encore become more pronounced in the airline's results. Even as Encore continues to create some cost headwinds for WestJet, the company believes its regional airline continues to stimulate demand in markets too thin for narrowbody aircraft.

Despite some external and internal pressures, WestJet's fundamentals remain strong. The company holds strong cash balances and favourable debt ratios while continuing to deliver shareholder returns.