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WestJet to introduce premium seating options

Aug. 1, 2012, Calgary - WestJet Airlines Ltd. will offer passengers more leg room in the first four rows on planes in its Boeing fleet, expecting to add more revenue from these higher priced "premium economy'' seats.


August 1, 2012
By The Canadian Press

"I don't expect our guests to feel any impact from that reconfiguration, but we'll certainly see the revenue benefit,'' president and CEO Gregg Saretsky told analysts on Wednesday.

However, the number of lower-cost seats available on each flight is going down, Saretsky said after WestJet announced a
second-quarter profit of $42.5 million and raised its dividend.

The seat change would appeal to WestJet's business class to compete with Air Canada for business travellers. The new class bridges a gap in ticket prices between economy and first-class, which are too costly for many travellers.

"We don't have any concern about seats going empty,'' Saretsky said.

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WestJet also will have a new online storefront and consumers will be able to select from a variety of fare categories, instead of
seeing just the lowest fare, he said.

The seats will give passengers 36 inches of leg room. The planes should be reconfigured by December and the premium economy seats will offer passengers with the Calgary-based airline early check-in, he said.

The airline said it will standardize leg room in other seats to 31 to 32 inches, in line with North American competitors.

WestJet's move follows a trend of similar upgrades to economy-class seats at international airlines.

Cathay Pacific announced Monday that it has accepted delivery of a new Boeing 777-300ER fitted with the new premium economy configuration, which features more leg room, as well as dedicated flight attendants for that area, special menus and champagne.

WestJet also announced Wednesday that it has firmed up orders for 20 of Bombardier's Q400 NextGen turboprop aircraft, with seven to be delivered in 2013 and the remainder to be delivered in stages through 2016. WestJet also has options to buy up to 25 additional Q400 aircraft.

The Q400 aircraft are for WestJet's planned low-cost regional airline.

"We remain on track for the launch of the low-cost regional airline in the second half of 2013 and are excited by this opportunity,'' Saretsky said.

"We have commenced hiring the first of up to 1,800 new jobs for our regional airline as well.''

Saretsky said WestJet has met with representatives from more than 30 airports, all hoping to have WestJet service in their
communities. Some destinations are expected to be announced in early 2013.

The airline said its quarterly dividend will increase to eight cents per share, up two cents per share or 33 per cent, starting in
late September.

In its financial results, WestJet announced a big increase in second-quarter profit that hit a record $42.5 million or 31 cents
per share. That was up from $25.6 million or 18 cents per share in the year-earlier period.

"We've had an amazing start to 2012 as this marks our second consecutive quarter of record net earnings and our 29th consecutive quarter of profitability,'' Saretsky said.

Despite the big increase, WestJet missed consensus estimates for profit and revenue.

The average analyst estimate was for a profit of 33 cents per share and revenue of $816 million, according to Thomson Reuters.

WestJet's revenue was up nine per cent from the same time last year, rising to $809.3 million from $742.3 million.

Thunderstorms in June forced the airline to cancel scores of flights in Calgary during a lengthy lightning advisory that brought
operations at the airport to a standstill.

During the quarter, WestJet announced a code-share agreement with South Korea's largest airline, Korean Air, and with China Eastern Airlines, one of the largest airlines in China.

Code share agreements allow travellers to more easily transfer from one airline's network to the other's.

The deals came in addition to code-share agreements with American Airlines, Cathay Pacific, Delta Air Lines, Japan Airlines, KLM and Korean Air.


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