WestJet Announces Record Fourth Quarter and Year-End Results



    Airline reports a 63.7% increase in fourth quarter earnings from
    operations

    CALGARY, Feb. 13 /CNW/ - 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
    -------------------------------------------------------------------------
                         Q4      Q4         %   Year-end  Year-end         %
                       2007    2006    change       2007      2006    change
    -------------------------------------------------------------------------
    Load Factor       77.7%   75.5%  2.2 pts.      80.7%     78.2%  2.5 pts.
    -------------------------------------------------------------------------
    ASM (available
     seat miles)
     billions        3.819   3.315      15.2%    14.545    12.524      16.1%
    -------------------------------------------------------------------------
    RPM (revenue
     passenger miles)
     billions        2.968   2.502      18.6%    11.739     9.792      19.9%
    -------------------------------------------------------------------------
    RASM (revenue
     per available
     seat mile)
     cents           14.49   13.64       6.2%     14.79     14.09       5.0%
    -------------------------------------------------------------------------
    Yield (revenue
     per revenue
     passenger mile)
     cents           18.65   18.07       3.2%     18.33     18.03       1.7%
    -------------------------------------------------------------------------
    CASM (cost per
     available
     seat mile)
     cents           12.57   12.29       2.3%   12.51(1)    12.50       0.1%
    -------------------------------------------------------------------------
    CASM excluding
     fuel - cents     8.84    9.08      (2.6%)   9.05(1)     9.10      (0.5%)
    -------------------------------------------------------------------------
    (1) excludes reservation system write-down of $31.9 million
    -------------------------------------------------------------------------
    

    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.
    "Two 737-700 aircraft were delivered in the fourth quarter, bringing our
total registered fleet size to 70 at year end. We accepted delivery of two
more 700-series aircraft in the early part of 2008 and will add an additional
five aircraft, three more 700s and two 800s, by the end of 2008 bringing our
fleet size to 77. Our capacity will increase in 2008 by 16% and we are
confident this will be absorbed through our successful capacity deployment
strategy.
    "WestJet is ready for 2008 and believes that our low-cost focus along
with the dedication of our people will see us continue our growth momentum. We
were thrilled to be awarded Canada's Most Admired Corporate Culture for the
third year in a row, as recognized by over 180 top executives across Canada.
Our WestJetters continue to demonstrate that they are committed to maintaining
our industry-leading position and financial strength."
    WestJet also reported fourth quarter and year-end operational
performance, achieving top-five ranking in all three categories for the full
year. WestJet calculates operational performance based on the Department of
Transportation's standards for the North American Airline industry.

    
    -------------------------------------------------------------------------
                         Q4      Q4          %  Year-end  Year-end         %
                       2007    2006     change      2007      2006    change
    -------------------------------------------------------------------------
    On-time
     performance      77.8%   81.4% (3.6 pts.)     82.6%     82.2%  0.4 pts.
    -------------------------------------------------------------------------
    Completion rate   99.0%   99.3% (0.3 pts.)     99.2%     99.4% (0.2 pts.)
    -------------------------------------------------------------------------
    Bag ratio          4.31    4.58     (5.9%)      4.26      4.64     (8.2%)
    -------------------------------------------------------------------------

    WestJet Airlines Ltd.
    Consolidated Financial Statements
    For the Three and Twelve Months Ended
    December 31, 2007 and 2006
    (Unaudited)


    WestJet Airlines Ltd.
    Consolidated Statement of Earnings
    (Stated in thousands of Canadian dollars, except per share amounts)
    (Unaudited)

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                 Three Months Ended       Twelve Months Ended
                                     December 31              December 31
                                  2007        2006         2007         2006
    -------------------------------------------------------------------------
    Revenues:
      Guest revenues         $ 502,379   $ 410,172  $ 1,899,159  $ 1,556,400
      Charter and other
       revenue                  43,055      37,666      227,997      194,869
      Interest income            7,943       4,279       24,301       13,815
    -------------------------------------------------------------------------
                               553,377     452,117    2,151,457    1,765,084
    Expenses:
      Aircraft fuel            142,359     106,307      503,931      425,506
      Airport operations        69,273      61,958      289,695      245,131
      Flight operations and
       navigational charges     65,892      62,299      259,389      229,821
      Sales and marketing       52,865      43,045      187,929      162,577
      Depreciation and
       amortization             32,838      30,115      127,223      111,442
      General and
       administration           26,909      22,657      104,263       83,025
      Inflight                  23,488      18,610       85,499       67,220
      Interest                  19,454      19,297       75,749       70,196
      Aircraft leasing          18,152      17,647       75,201       71,432
      Maintenance               18,489      16,870       74,653       67,501
      Guest services            10,256       8,486       35,810       31,739
      Loss on impairment of
       property and equipment        -           -       31,881            -

    -------------------------------------------------------------------------
                               479,975     407,291    1,851,223    1,565,590
    -------------------------------------------------------------------------
    Earnings from operations    73,402      44,826      300,234      199,494

    Non-operating income
     (expense):
      Gain (loss) on foreign
       exchange                (1,379)       2,783      (12,750)          32
      Gain (loss) on disposal
       of property and
       equipment                  (399)         47           54          839

      Non-recurring expenses         -           -            -      (15,600)
    -------------------------------------------------------------------------
                                (1,778)      2,830      (12,696)     (14,729)
    Employee profit share        8,845       5,355       48,568       20,284
    -------------------------------------------------------------------------
    Earnings before
     income taxes               62,779      42,301      238,970      164,481

    Income tax recovery
     (expense):
      Current                   (1,083)       (886)      (4,362)      (3,170)
      Future                    13,663     (14,764)     (41,775)     (46,635)
    -------------------------------------------------------------------------
                                12,580     (15,650)     (46,137)     (49,805)
    -------------------------------------------------------------------------
    Net earnings             $  75,359   $  26,651    $ 192,833  $   114,676
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    Earnings per share:
      Basic                  $    0.58   $    0.21    $    1.49  $      0.88
      Diluted                $    0.57   $    0.21    $    1.47  $      0.88
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    WestJet Airlines Ltd.
    Consolidated Balance Sheet
    (Stated in thousands of Canadian dollars)
    (Unaudited)

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                  December 31    December 31
                                                         2007           2006
    -------------------------------------------------------------------------
    Assets
    Current assets:
      Cash and cash equivalents                   $   653,558    $   377,517
      Accounts receivable                              15,009         12,645
      Income taxes recoverable                              -         13,820
      Assets held for sale                                  -         13,157
      Prepaid expenses, deposits and other             39,019         30,727
      Inventory                                        10,202          8,200
    -------------------------------------------------------------------------
                                                      717,788        456,066

    Property and equipment                          2,213,063      2,158,746

    Other assets                                       53,371        111,715
    -------------------------------------------------------------------------
                                                  $ 2,984,222    $ 2,726,527
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities and Shareholders' Equity
    Current liabilities:
      Accounts payable and accrued liabilities    $   168,171    $   121,157
      Advance ticket sales                            194,929        148,743
      Non-refundable guest credits                     54,139         40,508
      Current portion of long-term debt               172,992        153,720
      Current portion of obligations under capital
       lease                                              375            356
    -------------------------------------------------------------------------
                                                      590,606        464,484

    Long-term debt                                  1,256,526      1,291,136

    Obligations under capital lease                     1,108          1,483

    Other liabilities                                  11,337         14,114

    Future income tax                                 174,737        149,283
    -------------------------------------------------------------------------
                                                    2,034,314      1,920,500
    Shareholders' equity:
      Share capital                                   448,568        431,248
      Contributed surplus                              57,889         58,656
      Accumulated other comprehensive loss            (11,914)             -
      Retained earnings                               455,365        316,123
    -------------------------------------------------------------------------
                                                      949,908        806,027

    Commitments and contingencies
    -------------------------------------------------------------------------
                                                  $ 2,984,222    $ 2,726,527
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    WestJet Airlines Ltd.
    Consolidated Statement of Shareholders' Equity
    (Stated in thousands of Canadian dollars)
    (Unaudited)

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                  December 31    December 31
                                                         2007           2006
    -------------------------------------------------------------------------

    Share capital:
      Balance, beginning of year                  $   431,248    $   429,613
      Issuance of shares pursuant to stock option
       plans                                            1,551              -
      Stock-based compensation on stock options
       exercised                                       20,040          1,642
      Shares repurchased                               (4,271)             -
      Share issuance costs, net of tax                      -             (7)
    -------------------------------------------------------------------------
                                                      448,568        431,248

    Contributed surplus:
      Balance, beginning of year                       58,656         39,093
      Stock-based compensation expense                 19,273         21,205
      Stock-based compensation on stock options
       exercised                                      (20,040)        (1,642)
    -------------------------------------------------------------------------
                                                       57,889         58,656

    Accumulated other comprehensive loss:
      Balance, beginning of year                            -              -
      Change in accounting policy                     (13,420)             -
      Other comprehensive income                        1,506              -
    -------------------------------------------------------------------------
                                                      (11,914)             -

    Retained earnings:
      Balance, beginning of year                      316,123        201,447
      Change in accounting policy                     (36,612)             -
      Net earnings                                    192,833        114,676
      Shares repurchased                              (16,979)             -
    -------------------------------------------------------------------------
                                                      455,365        316,123

    -------------------------------------------------------------------------
    Total shareholders' equity                    $   949,908    $   806,027
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    WestJet Airlines Ltd.
    Consolidated Statement of Comprehensive Income
    (Stated in thousands of Canadian dollars)
    (Unaudited)

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                 Three Months Ended       Twelve Months Ended
                                    December 31               December 31
                                 2007        2006         2007          2006
    -------------------------------------------------------------------------

    Net earnings              $ 75,359    $ 26,651    $ 192,833    $ 114,676

    Other comprehensive income:
      Amortization of hedge
       settlements to aircraft
       leasing                     350           -        1,400            -
      Unrealized period change
       in fair value on cash
       flow hedges                  88           -           88            -
      Reclassification of net
       realized losses on cash
       flow hedges to net
       earnings                     18           -           18            -
    -------------------------------------------------------------------------
                                   456           -        1,506            -
    -------------------------------------------------------------------------
    Total comprehensive
     income                   $ 75,815    $ 26,651    $ 194,339    $ 114,676
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    WestJet Airlines Ltd.
    Consolidated Statement of Cash Flows
    (Stated in thousands of Canadian dollars)
    (Unaudited)

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                  Three Months Ended      Twelve Months Ended
                                     December 31               December 31
                                  2007        2006         2007         2006
    -------------------------------------------------------------------------
    Cash flows from (used in):

    Operating activities:
    Net earnings             $  75,359   $  26,651    $ 192,833    $ 114,676
    Items not involving cash:
      Depreciation and
       amortization             32,838      30,115      127,223      111,442
      Amortization of other
       liabilities                (235)       (217)        (897)        (868)
      Amortization of hedge
       settlements                 350         384        1,400        1,427
      Net realized loss on cash
       flow hedge                   18           -           18            -
      Loss on disposal of
       property, equipment and
       aircraft parts              573          44       32,773          394
      Stock-based compensation
       expense                   4,499       5,708       20,058       21,205
      Future income tax expense
       (recovery)              (13,663)     14,764       41,775       46,635
      Unrealized foreign
       exchange loss (gain)      1,300      (3,268)      13,813         (346)
      Change in non-cash
       working capital          (9,490)    (19,363)     112,069       43,707
    -------------------------------------------------------------------------
                                91,549      54,818      541,065      338,272
    -------------------------------------------------------------------------

    Financing activities:
      Increase in long-term
       debt                     32,040      37,811      141,178      418,581
      Repayment of long-term
       debt                    (39,349)    (36,554)    (156,516)    (132,559)
      Decrease in obligations
       under capital lease         (90)        (85)        (356)        (480)
      Share issuance costs           -           -            -          (10)
      Shares repurchased        (7,958)          -      (21,250)           -
      Issuance of common shares     84           -        1,551            -
      Increase in other assets  (7,102)     (8,011)     (20,897)     (27,830)
      Increase in non-cash
       working capital               -           -       (3,000)      (1,071)
    -------------------------------------------------------------------------
                               (22,375)     (6,839)     (59,290)     256,631
    -------------------------------------------------------------------------

    Investing activities:
      Aircraft additions       (45,215)    (43,789)    (191,437)    (438,906)
      Aircraft disposals         1,963          56        1,975        3,822
      Other property and
       equipment additions      (6,327)     (7,303)     (24,639)     (43,590)
      Other property and
       equipment disposals          18          65       13,819        1,611
    -------------------------------------------------------------------------
                               (49,561)    (50,971)    (200,282)    (477,063)
    -------------------------------------------------------------------------
    Cash flow from operating,
     financing and investing
     activities                 19,613      (2,992)     281,493      117,840

    Effect of exchange rate on
     cash and cash equivalents    (284)      1,565       (5,452)          37
    -------------------------------------------------------------------------
    Net change in cash and cash
     equivalents                19,329      (1,427)     276,041      117,877

    Cash and cash equivalents,
     beginning of period       634,229     378,944      377,517      259,640

    -------------------------------------------------------------------------
    Cash and cash equivalents,
     end of period           $ 653,558   $ 377,517    $ 653,558    $ 377,517
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Interest paid            $ (19,527)  $ (19,346)   $ (75,712)   $ (67,077)
    Taxes received (paid)    $    (807)  $    (544)   $  10,623    $  (3,081)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    WestJet Airlines Ltd.
    Supplemental information
    (Unaudited)

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                            Three Months Ended
                                               December 31
                                                                   increase/
                                           2007            2006    (decrease)
    -------------------------------------------------------------------------
    Operating highlights:
    Available seat miles (ASM)    3,818,613,107   3,314,759,901        15.2%
    Revenue passenger miles
     (RPM)                        2,967,645,307   2,502,375,293        18.6%
    Load factor                           77.7%           75.5%      2.2 pts
    Revenue per RPM (cents)               18.65           18.07         3.2%
    Revenue per ASM (cents)               14.49           13.64         6.2%
    Cost per passenger mile (cents)       16.17           16.28        (0.7%)
    Cost per ASM (cents)                  12.57           12.29         2.3%
    Fuel consumption (litres)       189,434,295     165,605,465        14.4%
    Fuel cost/litre (cents)               75.15           64.19        17.1%
    Segment guests                    3,280,342       2,889,435        13.5%
    Average stage length (miles)            869             827         5.1%
    Number of full time
     equivalent employees at
     period end                           5,682           4,974        14.2%
    Fleet size at period end                 70              63        11.1%
    Aircraft available for use               70              63        11.1%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                           Twelve Months Ended
                                                December 31
                                                                    increase/
                                           2007            2006    (decrease)
    -------------------------------------------------------------------------
    Operating highlights:
    Available seat miles (ASM)   14,544,737,340  12,524,379,943        16.1%
    Revenue passenger miles
     (RPM)                       11,739,063,003   9,791,878,403        19.9%
    Load factor                           80.7%           78.2%      2.5 pts
    Revenue per RPM (cents)               18.33           18.03         1.7%
    Revenue per ASM (cents)               14.79           14.09         5.0%
    Cost per passenger mile
     (cents)(1)                           15.50           15.99        (3.1%)
    Cost per ASM (cents)(1)               12.51           12.50         0.1%
    Fuel consumption (litres)       723,104,203     617,963,429        17.0%
    Fuel cost/litre (cents)               69.69           68.86         1.2%
    Segment guests                   13,004,726      11,168,027        16.4%
    Average stage length (miles)            856             833         2.8%
    Number of full time
     equivalent employees at
     period end                           5,682           4,974       14.2%
    Fleet size at period end                 70              63       11.1%
    Aircraft available for use               70              63       11.1%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1)Excludes reservation system write-down of $31.9 million in Q2 of 2007
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Conference call information

    WestJet will hold a live analysts' conference call today at 9 a.m. MT (11
a.m. ET). Sean Durfy, President and CEO and Vito Culmone, Executive
Vice-President, Finance and CFO will discuss WestJet's 2007 fourth quarter and
year-end results and answer questions from financial analysts. The conference
call is available through the toll-free telephone number 1-800-926-7748.
Participants are encouraged to join the call 10 minutes prior to the scheduled
start, at 8:50 a.m. MT (10:50 ET). The call can also be heard live through an
Internet webcast in the Investor Relations section of westjet.com.

    About WestJet

    WestJet is Canada's leading low-cost, high-value airline offering
scheduled service throughout its 45-city North American and Caribbean network.
Named Canada's most admired corporate culture in 2005, 2006 and 2007, WestJet
pioneered low-cost flying in Canada. With increased legroom and leather seats
on its modern fleet of 72 Boeing Next-Generation 737 aircraft, and live
seatback television provided by Bell ExpressVu on the majority of its fleet,
WestJet strives to be the number one choice for travellers.





For further information:

For further information: WestJet, Media Relations, Gillian Bentley,
(403) 444-2615, Website: www.westjet.com


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