WestJet: adjusting its fleet to restore margins and returns

Canada's second largest airline - WestJet - is working to ensure that it regains lost financial footing in 2019 after posting declines in key metrics during 2018. The company has opted to defer narrowbody aircraft in order to bolster its returns and margins.

The airline is also making some more nuanced changes to its fleet through lease extensions and the sale and leaseback of its first three Boeing 787-9s, which are scheduled for delivery in 2019.

WestJet's overall forecast capacity growth for 2019 seems high, given its quest to bolster its financial performance, but the airline is stressing that the bulk of its growth is driven by the addition of widebodies and fleet expansion at its new ULCC subsidiary, Swoop.

But with new domestic competition entering the market in 2019, and with incorporating the new 787s into its fleet and working to mature Swoop, WestJet could face hurdles in convincing markets that its long term vision will produce results.