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WestJet announces 72 per cent increase in net earnings

Nov. 3, 2010, Calgary - WestJet today reported third quarter 2010 net earnings of $54 million, or 37 cents per diluted share, which marks its 22nd consecutive quarter of profitability and a 72 per cent increase in net earnings, year over year.


November 3, 2010
By Carey Fredericks

WestJet reported an operating margin of 13.2 per cent, compared to 12.8 per cent in the third quarter of 2009. WestJet's third quarter 2010 pre-tax margin was 11.1 per cent, compared to 8.3 per cent in the same period in 2009.

    Operating highlights (stated in Canadian dollars)
    ————————————————————————-
                                                  Year-to-  Year-to-
                                                    date      date
                   Q3 2010   Q3 2009    Change      2010      2009    Change
    ————————————————————————-
    Net earnings
     (millions)      $54.0     $31.4     72.0%     $88.8     $78.0     13.8%
    ————————————————————————-
    Net earnings
     excluding
     special
     items*
     (millions)      $54.0     $31.4     72.0%     $94.9     $75.7     25.4%
    ————————————————————————-
    Diluted earnings
     per share       $0.37     $0.24     54.2%     $0.61     $0.61         –
    ————————————————————————-
    Diluted earnings
     per share
     excluding
     special
     items*        $0.37     $0.24     54.2%     $0.65     $0.59     10.2%
    ————————————————————————-
    Total revenues
     (millions)     $684.6    $600.6     14.0%  $1,916.4  $1,711.1     12.0%
    ————————————————————————-
    Operating
     margin          13.2%     12.8%  0.4 pts.      8.8%     10.2% (1.4 pts.)
    ————————————————————————-
    ASMs (available
     seat miles)
     (billions)      5.031     4.503     11.7%    14.514    13.175     10.2%
    ————————————————————————-
    RPMs (revenue
     passenger
     miles)
     (billions)      4.007     3.587     11.7%    11.671    10.374     12.5%
    ————————————————————————-
    Load factor      79.6%     79.7% (0.1 pts.)    80.4%     78.7%  1.7 pts.
    ————————————————————————-
    Yield (revenue
     per revenue
     passenger
     mile) (cents)   17.09     16.74      2.1%     16.42     16.49     (0.4%)
    ————————————————————————-
    RASM (revenue
     per available
     seat mile)
     (cents)         13.61     13.34      2.0%     13.20     12.99      1.6%
    ————————————————————————-
    CASM (cost per
     available
     seat mile)
     (cents)         11.81     11.63      1.5%     12.04     11.66      3.3%
    ————————————————————————-
    CASM excluding
     fuel and
     employee
     profit share
     (cents)*       8.25      8.16      1.1%      8.53      8.37      1.9%
    ————————————————————————-
    * Refer to reconciliations in the accompanying tables for further
        information regarding adjustments.

"We are very pleased with our third quarter results," said WestJet President and CEO Gregg Saretsky. "I thank WestJetters for their passion and commitment to providing outstanding guest service, which has boosted our bottom line. While delivering strong financial results, the quarter also involved tremendous effort leading up to the execution of two significant strategic milestones for us with the October announcement of WestJet's first code-share agreement, with Cathay Pacific Airways, and the first interline agreement with a U.S. carrier, American Airlines."

WestJet continues to focus on ways to reduce costs and make its operations more efficient, while providing guests with increased self-service options. The airline has now introduced self-serve baggage tagging at both Vancouver and Calgary airports, with plans to fully implement this capability at both Toronto Pearson and Edmonton International Airport by the end of 2010.

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The airline plans fourth quarter capacity to increase 13 to 14 per cent year over year which it expects to absorb while improving year-over-year RASM. WestJet is encouraged by the gradual recovery in pricing and the pace of current bookings.

WestJet is continuing its efforts to drive increased ancillary revenue while maintaining its value leadership position. Effective today, for travel on or after January 19, 2011, WestJet will begin charging a $20 fee to guests checking a second bag on all flights. Concurrent with this change, WestJet will reduce the fee for the third and fourth bags from$75 to $50. "These fees are less than what other North American airlines are charging," added Gregg Saretsky. "This, we believe, strikes the right balance for our guests, our shareholders and our employees."