WestJet Investor Day provides targets for 2018-2020

• Annual operating margin of 10% to 12%
• Cumulative free cash flow of $775 to $875 million
• An improving annual ROIC that is expected to exceed 13 per cent in 2020
• Leverage ratio of 1.2 by end of 2020

WestJet (TSX: WJA) today provided 2018 to 2020 targets at its Investor Day being held in Calgary from 8:30 a.m. MT (10:30 a.m. ET) to 12:00 noon MT (2:00 p.m. ET).

WestJet is targeting an annual operating margin of between 10 per cent and 12 per cent in 2018 to 2020 and an improving annual return on invested capital (ROIC(1)) that is expected to exceed 13 per cent in 2020. From 2018 to 2020, WestJet expects to deliver cumulative free cash flow(1) of $775 to $875 million, with capital expenditures of approximately $780 million in 2018, peaking in 2019 at approximately $1 billion and dropping to approximately $870 million in 2020. In terms of its key credit metric, WestJet estimates by the end of 2020 to be at 1.2 as measured by adjusted net debt over EBITDAR(1), and it expects to grow its number of unencumbered aircraft from 51 at the end of the third quarter of 2017 to 96 aircraft in 2020.

"We continue to invest in strategic initiatives that will support our transition from a low-cost point-to-point model into a high value-based network airline with a global footprint," said WestJet President and CEO Gregg Saretsky. "We have been laying the foundation for this transition by investing in our network and schedule, while deepening our airline partnerships and broadening our fare products to not only defend and grow our leisure business but also to attract and retain premium travellers."

WestJet believes its strategy to attract and retain premium travellers, combined with an enhanced revenue management system, with broadened fare products and growth in ancillary represent an annual revenue opportunity of between $300 million to $500 million through to 2022. In addition, WestJet has identified annual cost savings opportunities of $140 million to $200 million through 2022. These cost savings opportunities are spread over several initiatives that include fleet reconfigurations, airport operations cost savings, optimized maintenance plans, digital self service, and sales & distribution channel efficiencies.

"The expansion of WestJet Encore, our growing WestJet Rewards program and co-branded credit card, our penetration into the business traveller segment, combined with the launching of Swoop in the summer of 2018, and Boeing Dreamliner service commencing in 2019, give us great confidence in our ability to continue to deliver sustainable profitable growth and an improving annual return on invested capital that is expected to exceed 13 per cent in 2020. This exciting transition is all underpinned by the dedication and energy of our over 13,000 WestJetters who deliver our award-winning brand of friendly, caring service," added Mr. Saretsky.