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WestJet reports strong 2Q08 results amid challenging operating environment

4-Aug-2008

WestJet announced a 2Q08 net profit of USD29.5 million, representing a 161.4% year-on-year increase, and continuing the positive momentum gained in 2007 (2Q07 net profit was, however, impacted by the one-time non-recurring impairment loss related to costs previously capitalised for the airRes project). The underlying business was strong with a 2Q08 operating profit of USD54.9 million, representing an operating margin of 9.1%, and an increase of 54.0% year-on-year. [1728 words]

Unlock the following content in this report:

Subheadings:

  • Load factor slipping after period of sustained strength
  • "Continues to shine" in commitment to cost control; but escalating fuel prices hurting
  • Healthy balance sheet with CAD812 million in cash
  • 1H08: Net profit up 99.7%
  • To hedge approximately 50% of Jul-08 to Sep-08 fuel requirements
  • Committed to growth strategy
  • Continues effective seasonal deployment strategy
  • The strong get stronger
  • Outlook: Continued capacity growth ahead; unprecedented fuel prices to continue to impact margins

Graphs and data:

  • WestJet financial highlights for three months ended 30-Jun-08
  • WestJet operating margins: 2Q04 to 2Q08
  • North American LCC 2Q08 operating margins
  • WestJet total revenue and net profit margin: 3Q07 to 2Q08
  • North American airlines domestic capacity growth
  • First six months of 2008 (Bubble size reflects overall capacity)
  • Fuel cost as a proportion of total operating expenses: 2Q04 to 2Q08
  • WestJet unit cost per ASM breakdown and year-on-year change: 2Q08 vs 2Q07
  • Average market price of Jet Fuel: 2Q07 to 2Q08
  • WestJet financial highlights for six months ended 30-Jun-08
  • WestJet fleet growth plan: FY2007 to FY2013F
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