WestJet Announces Record Fourth Quarter and Year-End Results

WestJet (TSX: WJA) today announced record fourth quarter and full-year 2007 results. The airline's quarterly net earnings increased to $75.4 million from $26.7 million in the same period last year. Diluted earnings per share (EPS) for the fourth quarter was 57 cents compared to 21 cents in the same period last year. These results included a one-time favourable adjustment of $33.7 million due to corporate income tax rate reductions enacted by the federal government in the quarter. Excluding the one-time adjustment, fourth quarter net earnings were a record $41.7 million, an increase of 56.3%, while diluted EPS was 32 cents, an increase of 52.4%, when compared to the previous year.

For the full-year 2007, net earnings were $192.8 million, a 68.2% increase compared to $114.7 million in 2006. Diluted EPS for the year was $1.47, an increase of 67.0% compared to 88 cents in 2006. Excluding the favourable tax adjustment and the second quarter aiRES adjustment, 2007 net earnings were a record $181.3 million, an increase of 58.1%, while diluted EPS was $1.39, an increase of 58.0% from 2006.

Sean Durfy, WestJet President and CEO said today, "The fourth quarter of 2007 was a strong end to a great year for our airline. The fourth quarter capped 12 consecutive months of record load factor, revenues that surpassed $2 billion as well as increases in market share domestically and on our U.S., Caribbean and Mexican routes. I would like to personally thank our over 6,700 WestJetters; these results are a testament to their perseverance, commitment and passion."

The airline's fourth quarter earnings from operations were $73.4 million, representing an operating margin of 13.3% and an increase of 63.7% over fourth quarter 2006. Earnings from operations for the full-year 2007 were $300.2 million, representing an operating margin of 14.0% and an increase of 50.5% over full-year 2006.

Fourth quarter revenue grew 22.4% to $553.4 million compared to $452.1 million in the fourth quarter of 2006. The airline's 2007 revenue increased to $2.2 billion compared to $1.8 billion in 2006, an increase of 21.9%.


Operating Highlights

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                       Q4      Q4         %   Year-end  Year-end         %
                     2007    2006    change       2007      2006    change
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Load Factor          77.7%   75.5%  2.2 pts.      80.7%     78.2%  2.5 pts.
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ASM (available
 seat miles)
 billions           3.819   3.315      15.2%    14.545    12.524      16.1%
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RPM (revenue
 passenger miles)
 billions           2.968   2.502      18.6%    11.739     9.792      19.9%
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RASM (revenue per
 available seat mile)
 cents              14.49   13.64       6.2%     14.79     14.09       5.0%
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Yield (revenue
 per revenue
 passenger mile)
 cents              18.65   18.07       3.2%     18.33     18.03       1.7%
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CASM (cost per
 available
seat mile) cents    12.57   12.29       2.3%     12.51(1)  12.50       0.1%
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CASM excluding
 fuel - cents        8.84    9.08      (2.6%)     9.05(1)   9.10      (0.5%)
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(1) excludes reservation system write-down of $31.9 million
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Sean Durfy continued, "For both the quarter and the year, we once again demonstrated our ability to effectively manage our growth and match our capacity increases with market demands. We increased capacity and load factor while at the same time improving yield. We are particularly pleased to have ended both the quarter and the year with significant improvements in RASM.

"Our ongoing commitment to containing costs was reflected in our strong fourth quarter results that weathered increasing fuel prices. Fuel continues to be our biggest expense which we try to mitigate through our fuel-efficient fleet, blended winglet technology on our 700- and 800-series aircraft and other fuel saving initiatives. Overall, we experienced an increase in CASM for the fourth quarter, while keeping CASM for the full-year 2007 comparable to that of last year.

"We continued to manage our business in a cost-effective manner and are pleased with our fourth quarter CASM excluding fuel of 8.8 cents, 2.6% lower than that of 2006. We achieved cost declines in aircraft operations, flight operations, interest, aircraft leasing costs and maintenance. Our ability to effectively manage controllable costs positions us to better deal with fluctuating fuel prices.