WestJet has announced second quarter results for 2009 (2Q09) including net earnings of $9.2 million. Compared with the second quarter of 2008 (net earnings of $26.8 million), these results were negatively impacted by the weak economy driving lower yields in the marketplace.
Sean Durfy, WestJet's president and CEO, commented, "Similar to the first quarter, the weakened economy and aggressive pricing continue to have an unfavourable impact on RASM (revenue per available seat mile). However, lower fuel prices resulted in a significant decline in CASM (cast per ASM) from last year and lessened the profitability erosion."
The figures behind Durfy's remarks show that RASM dropped by 15.4% to 12.31 cents in 2Q09 from 14.55 cents in 2Q08, while CASM fell by 14.0% to 11.46 cents from 13.33 cents in the same period last year. Total revenues in 2Q09 were $531.2 million, a 13.8% drop compared with $616.0 million in 2Q08. Yield (revenue per revenue passenger mile) for 2Q09 was 16.17 cents, down 11.6% from 2Q08's figure of 18.30 cents.
"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 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%, while expanding our network into new destinations.
"The flexibility of our fleet deployment strategy allows us to quickly react to demand changes by adjusting our schedule for more profitable flying," added Durfy. "For the remainder of 2009, we will lower our aircraft utilisation rates through more efficient scheduling of domestic frequencies. This will lower our previously planned third quarter capacity growth to a decline of between one and two per cent. It will also drop our full-year capacity growth to between two and three per cent. For our winter schedule, we are introducing 11 new destinations and three new countries, plus adding many new route pairings between Canada and Mexico. We believe this will allow us to capture additional market share as we keep expanding WestJet and WestJet Vacations into the domestic, transborder and international markets."
"In the second quarter we introduced an internal program, 'All Eyes on Cost,' focused on cost containment for the remainder of 2009 and 2010. We have already identified a number of sustainable savings, cost deferrals and cost avoidances that will be implemented this year and next," Durfy noted.
WestJet plans to take delivery of two new aircraft in August, which will bring its fleet size to 81. For the balance of the year, WestJet plans to receive an additional five aircraft in the fourth quarter, which will bring its fleet to 86.
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