Posted on: 03 May 2011 by Ross McSweeny
WestJet has announced first quarter 2011 (1Q11) net earnings of C$48.2 million, a significant improvement from the C$2.4 million net earnings reported in the first quarter of 2010.
The airline achieved an operating margin of 10.3%, an increase of 6.4 percentage points compared with the operating margin of 3.9% in 1Q10.
"To start 2011 with strong earnings in an environment of elevated fuel costs is another testament to the resiliency of WestJet, the effectiveness of our business model, and the hard work of every WestJetter," declared WestJet president and CEO Gregg Saretsky.
Total revenues for the airline in 1Q11 were C$772.4 million, up 24.7% on 1Q10’s figure of C$619.3 million. RASM (revenue per available seat mile) was up by 12.1% at 14.77C¢ from 13.18 C¢. CASM (cost per available seat mile) went up by a smaller amount – 4.5% – to 13.24 C¢ from 1Q10’s figure of 12.67C¢.
The airline attributes the RASM increase mainly to significant yield improvement and slight load factor growth. "We are pleased that the market has absorbed the fare increases put in place to offset rising fuel costs. These strong first quarter results represent net earnings per guest of roughly twelve dollars which highlights the competitive nature of the airline industry," noted Saretsky. For 2Q11, WestJet is projecting fuel costs, excluding hedging, to range between C$0.95 and C$0.98 per litre, and is anticipating continued strong year-over-year RASM growth.