WestJet updates second quarter outlook

CALGARY, Canada – WestJet today announced June 2015 traffic results with a load factor of 76.9 percent, a decrease of 0.5 percentage points year over year.

CALGARY, Canada – WestJet today announced June 2015 traffic results with a load factor of 76.9 percent, a decrease of 0.5 percentage points year over year. Revenue passenger miles (RPMs), or traffic, increased 7.0 percent year over year with a more aggressive mix of lower fares, and capacity, measured in available seat miles (ASMs), was 7.6 percent higher over the same period.

WestJet achieved an on-time performance rate of 89.4 percent in June, an improvement of 3.7 percentage points year over year. In the second quarter of 2015, the airline achieved a load factor of 78.1 percent, a decrease of 1.5 percentage points year over year, and flew a record 5.0 million guests, a year-over-year increase of 3.9 percent or approximately 184,000 additional guests.

“We are pleased with our traffic growth in the second quarter and are committed to keeping our costs low in order to provide affordable air travel for our guests,” said WestJet President and CEO Gregg Saretsky. “I want to thank all WestJetters for their commitment to improving our on-time performance while continuing to provide our guests with the friendly caring service for which WestJet is known.”

June 2015 traffic results

June 2015 June 2014 Change
Load factor 76.9% 77.4% (0.5 pts)
ASMs (billions) 2.187 2.032 7.6%
RPMs (billions) 1.682 1.572 7.0%
Second quarter
2015 Second quarter
2014 Change
Load factor 78.1% 79.6% (1.5 pts)
ASMs (billions) 6.655 6.193 7.5%
RPMs (billions) 5.199 4.930 5.5%
Year-to-date 2015 Year-to-date 2014 Change
Load factor 79.9% 81.4% (1.5 pts)
ASMs (billions) 13.473 12.707 6.0%
RPMs (billions) 10.765 10.347 4.0%

WestJet today provided an update to its outlook for the second quarter of 2015. While continuing to expect year-over-year margin expansion and record net earnings for a second quarter, the airline now expects:

โ€ข As a result of a substantively enacted increase in the Alberta provincial corporate income tax rate from 10 to 12 percent, WestJet expects its effective tax rate for the full year 2015 to be 29 to 30 percent, as compared to its previous guidance of 27 to 28 percent. For the second quarter of 2015, WestJet expects its effective tax rate to be approximately 31 percent;

โ€ข RASM to be down approximately 5.7 percent year over year, as compared to its previous guidance of a moderate year-over-year decline, with the difference primarily driven by a more aggressive mix of lower fares during the quarter and higher than expected ASMs;

โ€ข CASM, excluding fuel and profit share to be up approximately 0.5 per cent year over year, as compared to its previous guidance of up 2.0 to 2.5 percent, with the difference primarily driven by lower than expected airport operating costs and lower marketing, general and administration expenses, as well as higher than expected ASMs; and

โ€ข Fuel cost per litre to be approximately 69 cents, at the high end of its previous guidance of 67 to 69 cents.

The outlook information provided above is a preliminary estimate only, is subject to completion of WestJet’s quarterly financial close processes and has not been reviewed by the Company’s auditors. Please see below for a cautionary statement with respect to the use of forward-looking information. WestJet does not intend to provide updates to guidance in future periods, except as may be required by law.

In the second quarter, WestJet launched non-stop service on several new routes. WestJet Encore began non-stop service between Toronto and Fredericton, NB on April 15, 2015 and between Calgary and Terrace, BC on May 3, 2015. WestJet also began non-stop service between Calgary and Yellowknife, NT as well as Toronto and Gander, NL on May 3, 2015 and between Halifax and Glasgow, Scotland on May 29, 2015.

In June, WestJet announced that it had selected London, England as the first transatlantic destination for its wide-body Boeing 767-300ERW aircraft, with service from Canada through London Gatwick beginning in the spring of 2016. Gatwick provides WestJet guests with easy access to central London, as well as connectivity to other low-cost airlines with service to destinations in Europe and beyond. Further announcements on schedules, pricing and launch cities will be communicated later this summer, with service commencing in spring 2016.

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Linda Hohnholz

Editor in chief for eTurboNews based in the eTN HQ.

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