WestJet’s profit soars 79.9% to $70.6 million
Nov. 7, 2012, Calgary - WestJet profits soared almost 80 per cent in the third quarter as the Calgary-based airline got lift from revenues that were up almost 12 per cent.
November 7, 2012 By The Canadian Press
WestJet said it earned net income of $70.6 million or 52 cents per share in the quarter, up from $39.3 million or 28 cents per
share in the comparable year-earlier period.
Revenue rose to $866.5 million from $755.3 million.
The average analyst estimate had been for a profit of 43 cents per share and revenue of $843 million, according to Thomson Reuters.
The results marked WestJet's 30th consecutive quarter of profitability and, based on the trailing 12 months, the it achieved a return on invested capital of 12.7 per cent, up from the 11.4 per cent reported last quarter.
"It was another great quarter for WestJet with significant earnings growth and continued margin expansion,'' said president and
CEO Gregg Saretsky.
He noted WestJet's return on invested capital surpassed the airline's target of 12 per cent.
WestJet aims to roll out its new discount regional carrier, called WestJet Encore, in the second half of 2013.
WestJet Encore will cater to smaller markets with Bombardier Q400 propeller aircraft. The company says it will announce the schedule for WestJet Encore early next year.
WestJet has previously said it plans to launch the carrier in one half of the country first, before expanding the service in the other
side of the country about nine months later.
In September, WestJet added British Airways as its eighth code-share partner, enabling the U.K. carrier to sell seats on the
Canadian airline's planes.
The agreement, which builds on a previous deal between the two carriers to collaborate on baggage handling and other tasks, is
meant to draw more international travellers into WestJet's network.
Code-share deals allow airlines to sell seats on one another's planes using the same two-digit code. In this case, the "BA'' code
will be used when travellers on British Airways flights to Vancouver, Calgary and Toronto connect to WestJet-operated flights to Ottawa, Edmonton and Victoria.
WestJet's fleet currently consists only of Boeing 737s, which don't have the range for overseas flights, so partnerships like the
one with British Airways are a key way for the company to expand its market reach.
Over the past year, WestJet has signed code-share deals with American Airlines, Cathay Pacific, China Eastern Airlines, Delta Airlines, Japan Airlines, KLM and Korean Air.
It also has 20 interline deals — less integrated partnerships that involve working together on baggage handling and ticketing. Interline deals often pave the way for code shares.