Record-high 6.5 million passengers flew with WestJet in Q3

WestJet’s ultra-low-cost carrier launch pushed back to summer 2018

CALGARY — WestJet says its new no-frills, low-cost airline won’t launch until at least next summer, with an initial flight schedule expected in early 2018.

WestJet announced its plans for an ultra-low-cost carrier in April 2017 and all indications pointed to a fast-tracked launch for the end of 2017 or early 2018.

The initial fleet for the ULCC is expected to include 10 ‘high-density’ B737-800s. In May 2017 Bob Cummings was appointed Executive Vice-President. Cummings, who has been with WestJet since 2005 at the EVP level, will be accountable for all aspects of the yet-to-be-named carrier, including planning, branding, pricing, product development and operationalization.

News about the ULCC’s launch date came as WestJet released its 2017 second quarter results. The airline’s net earnings totalled $48.4 million, compared with $36.7 million in the second quarter of 2016, an increase of 32%. Year-to-date net earnings came in at $96.7 million, down 22% from year-to-date 2016.

Total revenue for the quarter was up 11%, from $949.3 million in Q2 2016 to $1.55 billion in 2017. Year-to-date revenue was also up, by 9.5%
WestJet also achieved its 49th consecutive quarter of profitability and flew a record 5.9 million guests.

“I am very pleased with the positive momentum we are seeing in our business as we reported second quarter earnings growth, margin expansion, double digit revenue growth, and for the second consecutive quarter positive year over year RASM growth,” said WestJet President and CEO Gregg Saretsky. “Clearly our business fundamentals are strong and we are confident that the strategic initiatives we are pursuing position us for continued profitable growth.”

Air Canada has also released its Q2 2017 results, including record-breaking earnings totalling $670 million, up from $605 million in Q2 2016.

Air Canada’s Q2 2017 operating income was $281 million versus $277 million in Q2 2016. The airline’s adjusted net income was $215 million compared to $203 million in Q2 2016.

“I am pleased to report that, in our second quarter, we delivered record operating revenues, record EBITDAR and ended with record liquidity levels, exceeding last year’s financial results and analysts’ consensus estimates for EBITDAR,” said Air Canada President and CEO Calin Rovinescu. “We also improved our guidance for key financial measures, including a significant improvement in projected free cash flow for 2017.”

Air Canada launched 16 international and U.S. transborder routes this quarter alone. “On June 29th we served close to 167,000 customers, setting an all-time record which we expect to surpass during the upcoming August long weekend,” said Rovinescu.

He said demand continues to be robust in a stable fuel and pricing environment. In 2018, capacity growth, driven by Air Canada’s wide-body fleet expansion, will begin to slow as the airline shift its focus to its mainline narrow-body fleet replacement program which is expected to further reduce our unit costs and improve operating margins.

With files from Canadian Press