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WestJet - Rare profit in tough 3Q08, but showing signs of challenging operating environment


WestJet continued its profitability trend in the three months ended 30-Sep-08 (3Q08), reporting a net profit of USD45.4 million (although this represented a 28.1% year-on-year reduction) and an operating profit of USD80.9 million (representing an operating margin of 13.7%, and a reduction of 24.8% year-on-year). However, WestJet’s 3Q08 results, while “among the best worldwide”, reflected the challenges in the current operating environment, characterised by fluctuating oil prices and tumultuous conditions in the financial and economic environment. [1663 words]

Unlock the following content in this report:


  • WestJet financial highlights for three months ended 30-Sep-08
  • Ancillary revenues increasing, but significant opportunities for growth
  • Load factor slipping after period of sustained strength; but gaining market share from rival
  • Continues to shine in commitment to cost control
  • To hedge approximately 20% of 2009 fuel requirements
  • Healthy balance sheet with CAD806 million in cash
  • Continues effective seasonal deployment strategy
  • Expanding international reach through commercial agreements
  • Outlook: Cautiously optimistic

Graphs and data:

  • WestJet operating margins: 2Q04 to 3Q08
  • North American LCC 3Q08 operating margins
  • WestJet revenue and net profit margin (%): CAD
  • Select North American carriers yield (per RPM): 3Q08
  • Fuel cost as a proportion of total operating expenses: 2Q04 to 3Q08
  • WestJet unit cost per ASM breakdown and year-on-year change: 2Q08 vs 2Q07 and 3Q07 vs 3Q08
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