WestJet has a record second quarter

WestJet Airlines (Calgary) today announced a second quarter net earnings record of C$42.5 million, or C$0.31 per diluted share; up from the net earnings of C$25.6 million, or C$0.18 per diluted share, reported in the second quarter of 2011. These financial results mark WestJet’s 29th consecutive quarter of profitability. Based on the trailing twelve months, the airline achieved a return on invested capital of 11.4 per cent, up from the 10.8 per cent reported last quarter.

Today, WestJet also announced that it will be introducing a premium economy product on its entire Boeing 737 fleet featuring extra legroom, convenience and other amenities. Modifications to the aircraft will begin in August and the airline expects to have the fleet fully reconfigured by the end of 2012.

Operating highlights (stated in Canadian dollars)

Q2 2012 Q2 2011 Change Year-to-date 2012 Year-to-date 2011 Change
Net earnings (millions) $42.5 $25.6 65.9% $110.8 $73.9 50.0%
Diluted earnings per share $0.31 $0.18 72.2% $0.81 $0.52 55.8%
Total revenues (millions) $809.3 $742.3 9.0% $1,700.2 $1,514.7 12.2%
Operating margin 8.7% 6.9% 1.8 pts. 10.4% 8.7% 1.7 pts.
ASMs (available seat miles) (billions) 5.389 5.238 2.9% 11.079 10.468 5.8%
RPMs (revenue passenger miles) (billions) 4.395 4.092 7.4% 9.116 8.382 8.8%
Load factor 81.6% 78.1% 3.5 pts. 82.3% 80.1% 2.2 pts.
Segment guests 4,267,598 3,941,609 8.3% 8,498,013 7,840,717 8.4%
Yield (revenue per revenue passenger mile) (cents) 18.41 18.14 1.5% 18.65 18.07 3.2%
RASM (revenue per available seat mile) (cents) 15.02 14.17 6.0% 15.35 14.47 6.1%
CASM (cost per available seat mile) (cents) 13.71 13.19 3.9% 13.76 13.22 4.1%
CASM, excluding fuel and employee profit share (cents)* 9.12 8.70 4.8% 9.03 8.81 2.5%

WestJet expects RASM growth in the third quarter to be moderately stronger than the first half growth and anticipates ongoing operating margin expansion in the second half of 2012.

WestJet now projects its full-year CASM, excluding fuel and employee profit share to increase between three to 3.5 per cent year over year from its previous expectation of up 1.5 to 2.5 per cent. This revision is primarily due to higher flight operations and inflight recruitment and training expenses in the fourth quarter in anticipation of our expanded winter schedule which was only recently finalized, increased maintenance expense and a slight reduction in capacity associated with the aircraft reconfiguration project. The airline anticipates that its fuel costs will range between $0.90 and $0.92 per litre for the third quarter of 2012.

The airline also declared an increase to its quarterly dividend from $0.06 to $0.08.

WestJet and Bombardier signed a definitive purchase agreement on July 31, 2012. The purchase agreement includes a firm order of 20 DHC-8-402 (Q400) NextGen turboprop aircraft with purchase options for an additional 25 Q400 aircraft. Of the firm orders, seven turboprops are scheduled to be delivered in 2013. This will be followed by seven more of the confirmed orders in 2014, four in 2015 and two in 2016. The scheduled delivery slots for the 25 optional aircraft range between 2014 and 2018.

In other news, WestJet and WestJet Vacations today announced that guests on board WestJet flights can expect an extra-special inflight experience as part of their travels during the month of August.

Working with the Walt Disney Company (Canada) Ltd., WestJet is launching a unique inflight experience with a little Disney-inspired magic on board. Guests will receive complimentary Disney-themed snacks and napkins while enjoying free Disney cartoons and movies on seatback televisions throughout the flight. On select routes, guests will also enjoy Disney-themed jokes, fun facts and a complimentary gift.

Copyright Photo: Bruce Drum.