Newspaper article The Canadian Press

WestJet Says Efforts to Attract Business Customers, Encore Exceeding Forecasts

Newspaper article The Canadian Press

WestJet Says Efforts to Attract Business Customers, Encore Exceeding Forecasts

Article excerpt

WestJet Q3 profit slips but beats estimates


New fare options, efforts to attract business customers and the launch of a regional service are exceeding expectations and beginning to deliver millions of dollars in additional revenue, WestJet Airlines (TSX:WJA) said Tuesday.

The Calgary-based airline hopes to generate about $80 million in annualized ancillary revenues next year, partially from last-minute upgrades and premium economy seating.

Up to $30 million is expected in 2013, including $10 million realized in the third quarter, half of which came from customers seeking upgrades.

WestJet is trying to lure business travellers from rival Air Canada. Instead of offering a business class section, it has allocated about 18 seats on flights to business class and increased flexibility to change travel plans through its premium economy Plus product.

The carrier expects to end the year on a high note after slightly beating analyst forecasts in the third quarter, despite a drop in net income.

It anticipates that capacity will increase by seven to 7.5 per cent in the quarter on flat revenue per available seat mile and lower unit costs. Its new WestJet Encore regional service is expected to account for about half next year's four to six per cent forecasted growth in capacity.

WestJet reported its 34th consecutive profitable quarter in the period ended Sept. 30, earning $65.1 million or 50 cents per diluted share. That was down 7.8 per cent from $70.6 million or 52 cents per share a year earlier.

Analysts had looked for 48 cents per share on an adjusted basis and 49 cents per share under standard accounting, according to estimates from Thomson Reuters.

Total revenue grew to $924.8 million from $866.5 million a year earlier, an increase of 6.7 per cent.

"We're not apologetic at all about the results," president and CEO Gregg Saretsky said during a conference call when asked about the lower profits.

"It's the third best quarter in our 17 years (in operation). We grew capacity significantly (and) it improved our market position. We're gaining traction in the business travel market...and it has positioned us nicely on a go-forward basis. …

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