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CALGARY, Aug 06, 2009 /PRNewswire-FirstCall via COMTEX/ -- WestJet (WJA) today announced second quarter results for 2009. The airline reported net earnings of $9.2 million, or seven cents per diluted share. Compared to the second quarter of 2008, these results were negatively impacted by the weak economy driving lower yields in the marketplace.

Sean Durfy, WestJet President and CEO, commented, "Similar to the first quarter, the weakened economy and aggressive pricing continue to have an unfavorable impact on RASM. However, lower fuel prices resulted in a significant decline in CASM from last year and lessened the profitability erosion."

"In the face of these daunting times, our WestJetters continue to show how much they care about our guests and our company. Our on-time performance, completion and baggage rates were exceptional this quarter, which along with our caring WestJetter-driven service, continues to build guest loyalty. For that, I'm truly appreciative," acknowledged Sean Durfy. "Once again, we demonstrated the strength and sustainability of our business strategy, even in this difficult climate. In the face of poor demand conditions, we were able to produce a solid operating margin of 6.9 per cent, while expanding our network into new destinations."

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CALGARY, Aug 06, 2009 /PRNewswire-FirstCall via COMTEX/ -- WestJet (WJA) today announced second quarter results for 2009. The airline reported net earnings of $9.2 million, or seven cents per diluted share. Compared to the second quarter of 2008, these results were negatively impacted by the weak economy driving lower yields in the marketplace.

Sean Durfy, WestJet President and CEO, commented, "Similar to the first quarter, the weakened economy and aggressive pricing continue to have an unfavorable impact on RASM. However, lower fuel prices resulted in a significant decline in CASM from last year and lessened the profitability erosion."

"In the face of these daunting times, our WestJetters continue to show how much they care about our guests and our company. Our on-time performance, completion and baggage rates were exceptional this quarter, which along with our caring WestJetter-driven service, continues to build guest loyalty. For that, I'm truly appreciative," acknowledged Sean Durfy. "Once again, we demonstrated the strength and sustainability of our business strategy, even in this difficult climate. In the face of poor demand conditions, we were able to produce a solid operating margin of 6.9 per cent, while expanding our network into new destinations."

I think in retrospect, we will see the second quarter of 2009 as the worst, in relative turns, of the economic crisis because it will have most closely reflected the mood of people in the winter and early spring - when they should have been contemplating booking vacations - about the free falling economy. Now, going forward, there is a bit more optimism about where things are headed, and I expect that to be reflected in forward bookings for all carriers. It will be a long climb back for the industry - no miracle turnarounds - but the worst may be over.

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Guest rattler

WestJet announces July load factor of 76.4 per cent

    CALGARY, Aug. 6 /CNW/ - WestJet today announced July traffic results with

a load factor of 76.4 per cent. Revenue passenger miles (RPM) decreased 4.5

per cent year over year and capacity, measured in available seat miles (ASM),

declined 0.4 per cent over the same period.

    "We are encouraged by the number of people travelling on WestJet flights

this year, and we feel honoured that every year a greater percentage of

Canadians choose to fly with us," said Sean Durfy, WestJet President and CEO.

"Our Care-antee and trusted brand are critical in providing peace of mind and

a human touch to our guests in these uncertain times. Thank you to all of our

WestJetters for continuing to build and deliver on our great reputation every

day."

                          July 2009 traffic results

    -------------------------------------------------------------------------

                            July 2009          July 2008          Change

    -------------------------------------------------------------------------

    Load factor                76.4%              79.7%          (3.3 pts.)

    -------------------------------------------------------------------------

    ASMs (billions)            1.552              1.558            (0.4%)

    -------------------------------------------------------------------------

    RPMs (billions)            1.186              1.242            (4.5%)

    -------------------------------------------------------------------------

    -------------------------------------------------------------------------

                          Year-to-date        Year-to-date        Change

                              2009                2008

    -------------------------------------------------------------------------

    Load factor                78.0%              80.5%          (2.5 pts.)

    -------------------------------------------------------------------------

    ASMs (billions)          10.224              9.858            3.7%

    -------------------------------------------------------------------------

    RPMs (billions)            7.973              7.939            0.4%

    -------------------------------------------------------------------------

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Costs were half a cent below my estimate, rasm slightly below my estimates resulting in an operating margin about 5% pts higher than I expected.

The break-even load factor including interest was 73.3%, down from 74.7% in 2Q 2008.

This points to a healthy 12-14% margin in 3Q.

There are many folks getting paralysis by ananlysis.

The bottomline is you can never go too far wrong by making money in what is usually your worst quarter when most of the other airlines in North America are losing their shirts in what is usually their best quarter.

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Costs were half a cent below my estimate, rasm slightly below my estimates resulting in an operating margin about 5% pts higher than I expected.

The break-even load factor including interest was 73.3%, down from 74.7% in 2Q 2008.

This points to a healthy 12-14% margin in 3Q.

There are many folks getting paralysis by ananlysis.

The bottomline is you can never go too far wrong by making money in what is usually your worst quarter when most of the other airlines in North America  are losing their shirts in what is usually their best quarter.

When did the second quarter become Westjet's worst? That's a unique spin.

It's a good thing to make money in these times, but the question is, is WS doing as well as it could, or should?

Maybe it's been working too hard to run Air Canada out of business by depressing domestic fares? The July traffic numbers are far from soothing. Imagine being the more aggressive discounter and yet losing market share to a hobbled Air Canada.

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I suspect it may be more of a case where WestJet has figured out that even with a skimpy, miniscule 11.4 cent cost per available seat mile, there is a point at which there's no point chasing marketshare to create meaningless load factor statistics.

WestJet broke even at 73.3% in 2Q. That's less than SWA and at least 10 pts below the best of the US legacy airlines.

And that's in WJ's seasonally worst quarter.....

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Costs were half a cent below my estimate, rasm slightly below my estimates resulting in an operating margin about 5% pts higher than I expected.

The break-even load factor including interest was 73.3%, down from 74.7% in 2Q 2008.

This points to a healthy 12-14% margin in 3Q.

There are many folks getting paralysis by ananlysis.

The bottomline is you can never go too far wrong by making money in what is usually your worst quarter when most of the other airlines in North America are losing their shirts in what is usually their best quarter.

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Nothing like too many beverages to incite a good urinary discourse wink.gif

So sorry. Been working off a Blackberry for a few days.....doesn't work well with this site....thus the double posts.

If you look back over the past few years, you will see their 2Q is typically just about their weakest quarter.

cool26.gif

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When did the second quarter become Westjet's worst? That's a unique spin.

It's a good thing to make money in these times, but the question is, is WS doing as well as it could, or should?

Maybe it's been working too hard to run Air Canada out of business by depressing domestic fares? The July traffic numbers are far from soothing. Imagine being the more aggressive discounter and yet losing market share to a hobbled Air Canada.

When did the second quarter become Westjet's worst? That's a unique spin.

No spin, my friend.

Since the full year after SG was put to rest, here are WJ's average quarterly operating margins.

1Q: 12.74%

2Q: 12.29%

3Q: 17.06%

4Q: 13.18%

If you include all the way back to 2004, 1Q is slightly below 2Q, but that is entirely the result of 1Q 2005 when SG was in it's death throes and WJ took a -3.26% operating loss in the quarter.

Unlike the legacy carriers, whose 2Q is typically the 2nd best quarter of the year, WestJet's 2Q is typically the worst quarter of the year.

I'd have to say that as the only US DoT defined major airline that grew yoy, reporting the 6th highest operating margin amongst independent publicly traded, (ie non-fee per departure or CPA regulatated carriers, who's profit is guaranteed even if the l/f is 0%), and with the second lowest break-even load factor, (that dropped yoy, rather than jumped like most others in North America whose desire to maintain market share at all costs caused their belf's to skyrocket), all of which occuring during their worst seasonal quarter, that these are pretty darn good numbers.

The bottomline is the bottomline.

cool26.gif

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