Wj Q2 Results + Widebody Type Confirmation

[Tango Niner]

Staying with Boeing.

http://westjet2.mediaroom.com/index.php?s=43&item=909

[DEFCON]

What are WJ's plan for freight to fill the belly of the 763's?

[Thebean]

Outstanding results for what is traditionally WJ's weakest quarter.

Margin up from 7.88% to 8.43%, even with fuel up 8%.

ASL significantly down due to large drop from 978 to 918 miles. This may actually be WJ's largest quarterly ASL change in the history of the company.

This caused casm to rise from 13.37 to 13.94 cents, but yield more than compensated with an increase from 18.05 to 18.87 cents, as is typical given the inverse relationship of the two. Rasm went up from 14.33 to 15.02 cents.

Break-even dropped from 74.11% to 73.87%. Industry numbers have not yet been compiled, but this will be a near industry leading metric.

All this was done in a 12 month period where Encore grew from zero to a dozen or more aircraft. I can't think of too many airlines that have accomplished that feat, ever.

I can think of more than a few airlines that would be doing cartwheels to post these sorts of numbers in what is traditionally their worst quarter.

It'll be interesting to see how the trends compare when other airlines post their quarterly numbers. The street will want to see the same, or even better numbers given the strenuous predictions of strategic perfection that have been made, but also need to recognize that any comparisons made are comparing WJ's worst quarter with another airlines 2nd best quarter.

Raymond James recent report pointed this out in spades. It should be required reading for any airline investor north of the border.

[Seeker]

Congrats to all Westjetters.

I'm happy to see a Canadian company doing well. I'm expecting continuing improvement in Air Canada's numbers too. Although they likely won't be as good as yours we're making progress. A good strong duoploy is probably the best scenario for the country. Now, if only we can, together, keep the ULCC wolves from messing it up!

[dagger]

Congrats to all Westjetters.

I'm happy to see a Canadian company doing well. I'm expecting continuing improvement in Air Canada's numbers too. Although they likely won't be as good as yours we're making progress. A good strong duoploy is probably the best scenario for the country. Now, if only we can, together, keep the ULCC wolves from messing it up!

I see in Air Finance Journal that AC has got Ex-Im backed financing from a Canadian source for its first seven 787s. It's been a bloody long time since I read of a Canadian bank providing AC with aircraft financing. CIBC has provided some lines of credit, but that was in the days when it was sole Aeroplan bank card issuer and they wanted to keep the Golden Goose alive.

[airt]

Still holding their cards as to where they are acquiring the 67`s

I laughed when they were referred to in the conference call as ``mature``

[blues deville]

Still holding their cards as to where they are acquiring the 67`s

I laughed when they were referred to in the conference call as ``mature``

New paint and interiors. No one will know how old they are.

[CanadaEH]

Couldn't be any older than our 200 series aircraft. Some of them were right up there with some of the highest cycles and hours of 737 aircraft if I remember correctly. I also don't think the 767 aircraft ate here long term. There has to be a plan in place for new wide body replacements once the aircraft has been proven.

[airt]

Couldn't be any older than our 200 series aircraft. Some of them were right up there with some of the highest cycles and hours of 737 aircraft if I remember correctly. I also don't think the 767 aircraft ate here long term. There has to be a plan in place for new wide body replacements once the aircraft has been proven.

Don`t get me wrong. I loved flying the 200`s.I`m sure the 67`s will be fun too.

Just found the ``mature`` spin amusing.

[dagger]

New paint and interiors. No one will know how old they are.

Maintenance will. 767-300ERs can date back to the early 1980s.

[rudder]

The decision, however obvious, reinforces that the future of the WJ fleet is solidly with Boeing and not Airbus notwithstanding the current availability of modestly used A330's and the recent announcement of the A330NEO. I wonder what discussions, if any, have already taken place with Boeing about WJ medium to long term fleet plans both NB (some already announced) and WB.

Therefore the trend continues of no new Airbus orders from the Canadian operators although there are some suggestions that AC may extend the 320/330 presence albeit in Rouge paint. Perhaps that is a precursor to interest in theA320NEO/A330NEO for AC. Time will tell.

[dagger]

The decision, however obvious, reinforces that the future of the WJ fleet is solidly with Boeing and not Airbus notwithstanding the current availability of modestly used A330's and the recent announcement of the A330NEO. I wonder what discussions, if any, have already taken place with Boeing about WJ medium to long term fleet plans both NB (some already announced) and WB.

Therefore the trend continues of no new Airbus orders from the Canadian operators although there are some suggestions that AC may extend the 320/330 presence albeit in Rouge paint. Perhaps that is a precursor to interest in theA320NEO/A330NEO for AC. Time will tell.

I could see the 330NEO, but the 320NEO? Deliveries for that are backlogged into the next decade, right?

Maybe AC will shift the 330-300s, into rouge.

[Tango Niner]

Rumour I've heard is some mid-late-90's ships from Qantas. Still old but not 80's old.

[acsidestick]

Q

[rudder]

I could see the 330NEO, but the 320NEO? Deliveries for that are backlogged into the next decade, right?

Maybe AC will shift the 330-300s, into rouge.

The fuel reduction numbers on the NEO line are impressive. For an existing operator with pre-existing Airbus infrastructure the attraction is significant. The 330NEO looks to be a big hit but will put a huge dent in the A350 order book. It probably would have been NEO for the AC NB order if Airbus were willing to re-market the 190's. I suspect that hey were not. Given that the 737 does not have ULD capability AC may regret going with the MAX although I am guessing that there is spillover in incentives as between the 737/777/787 orders that AC has with Boeing.

[manwest]

WestJet tweet:

https://twitter.com/WestJet/status/494130917984587777

[Mitch Cronin]

There are undoubtedly those who will argue with me, but I think 67's age well.... somewhat more expensively than 37's, probably (and nowhere near as cool as DC10's! ), but they're still good old Boeing trucks that'll serve a vigilant owner quite well into the future... I think the WJ folks will easily master the common nuisances, like nose wheel well door sensor faults and misrigs, leaking rudder/aileron actuators... pneumatic snags, apu snags, etc... those machines can be fantastic when their idiosyncrasies are well understood (though I still think Boeing should have dropped that whole pneumatic system in the garbage and either adopted some Airbus architecture, or started afresh.... -without the committee of old ladies!) .... and I'll betcha WJ already has a whole host of characters who only have to wipe some dust off their manuals to refresh their memories...

...in short, I reckon WJ will do really well with 67's as an interim wide body, until they can snag some 787's. ....and as a simple ex-wrench-wielder, I applaud the sanity of sticking with a single manufacturer!

[Maverick]

....and as a simple ex-wrench-wielder

???

[Thebean]

WestJet's two ex-Southwest birds were amongst the highest cycle 737-200's on the planet. They were also amongst WJ's most reliable aircraft over the first five years at WJ. I doubt the initial WB aircraft will be around much longer than that.

Lest anyone be confused as to the relationship between stage length and casm, Air Canada generates more asms on an HD 777 round trip from YVR to PEK than WJ generates on ALL its daily western triangle flying + ALL it's daily Alberta to Abbotsford flying + ALL of its daily Alberta and BC to Vancouver Island flying.

Are landing gear overhaul reserves on a 777 more than those on a 737NG? Sure. Are they 48x more? I doubt it.

[one-o-wonder]

"Are landing gear overhaul reserves on a 777 more than those on a 737NG? Sure. Are they 48x more? I doubt it."

Bean, what do you mean by landing gear overhaul reserves?

[Maverick]

WestJet's two ex-Southwest birds were amongst the highest cycle 737-200's on the planet. They were also amongst WJ's most reliable aircraft over the first five years at WJ. I doubt the initial WB aircraft will be around much longer than that.

Lest anyone be confused as to the relationship between stage length and casm, Air Canada generates more asms on an HD 777 round trip from YVR to PEK than WJ generates on ALL its daily western triangle flying + ALL it's daily Alberta to Abbotsford flying + ALL of its daily Alberta and BC to Vancouver Island flying.

Are landing gear overhaul reserves on a 777 more than those on a 737NG? Sure. Are they 48x more? I doubt it.

Agreed on the old -200's. At one point we had both the highest cycle and highest airframe time 737's in the world. Both aircraft were more reliable than the very last one we got from Central America (A/C 756).

It was a P.O.S. when we got it and a P.O.S. when it left.

Oh, the memories!

[Thebean]

Some components such as landing gear life is cycle driven. After a certain number of take offs and landings, they have to be overhauled or replaced.

Lessors negotiate the cost per cycle for the replacement or refurbishment of these and numerous other parts whose life span is based on this parameter.

The point in the example is a yvr-pek r/t generating all those ASM's would result in 2 instances of landing gear usage. To generate the same ASM's WJ would use the landing gear on about 96 flights.

Yes, the maintenance reserve for a 777 landing gear would be considerably higher than a 737, but it's not 48 times more expensive.

The bottom-line is the cost per asm for the maintenance reserve for landing gear on the longer haul flight would be a fraction of the casm incurred on the 96 short haul sectors.

This is but a small example why long haul flying has lower unit costs than short haul flying.

[Fido]

Believe it if you must.

[Maverick]

Believe it if you must.

Did you actually read it??

I, as most people know work for WestJet. We have the -600, -700 and -800's. I am truly amazed at the difference I see between the types. The -600 for the most part is really short haul, 1 hr/cycle. The -700 right around 2hr/cycle and the -800 at 3+ hr/cycle and the wear and tear is really noticeable. Short haul beats the crap out of aircraft. Tires, brakes, flaps, doors, interiors etc.

Aircraft are really happy droning along for 10+ hours like 777's do.

[Fido]

Did you actually read it??

I, as most people know work for WestJet. We have the -600, -700 and -800's. I am truly amazed at the difference I see between the types. The -600 for the most part is really short haul, 1 hr/cycle. The -700 right around 2hr/cycle and the -800 at 3+ hr/cycle and the wear and tear is really noticeable. Short haul beats the crap out of aircraft. Tires, brakes, flaps, doors, interiors etc.

Aircraft are really happy droning along for 10+ hours like 777's do.

So

Maintenance costs are less than 10% of an airlines worries.

What are landing gear costs as a percentage of total maintenance costs?