WestJet attains investment-grade as it faces near-term cost creep

Canada's WestJet recently celebrated achieving an investment grade rating from Standard and Poor's, a worthy accomplishment given the short list of carriers that have managed to reach that important milestone.

The endorsement is a reflection of WestJet's strong performance in several key financial metrics, and its successful management of debt and liquidity levels while it has undertaken substantial changes to its business during the last year which include the launch of its new regional subsidiary Encore.

But in the short-term WestJet is facing some cost pressure, driven in part by its new business initiatives, mainly Encore, that have some time before reaching full maturity. Despite the cost creep the carrier assures that its business fundamentals and the Canadian market place remain strong. The carrier has built a strong foundation to weather the challenges, but ultimately it needs to keep costs in check to fully enjoy its new-found investment-worthy status.