WestJet profits soar

Photo: Trevor Rockliffe

Profits soar at Westjet

WestJet (TSX:WJA) is reporting its "best ever" quarterly earnings, while also announcing deal to sell 10 of its oldest jets and replace them with 10 newer ones.

The Calgary-based airline says its first-quarter net income rose 33.3 per cent to $91.1 million or 68 cents per share. That compared with net earnings of $68.3 million or 49 cents per share in the same 2012 period.

Total revenue was up 8.6 per cent at $967.2 million from $891 million a year ago.

These results mark WestJet's 32nd consecutive quarter of profitability.

Based on the trailing 12 months, the airline achieved a return on invested capital of 14.3 per cent, up from the 13.7 per cent reported in the previous quarter

"We are very pleased to report our best ever quarterly earnings and, for the third consecutive quarter, we exceeded our 12 per cent ROIC target by achieving 14.3 per cent," WestJet president and CEO Gregg Saretsky said in releasing the company's earnings report Tuesday.

WestJet did not identify the "third party" buyer of its oldest Boeing Next-Generation 737-700 aircraft, but said the sales would be made in 2014 and 2015.

Meanwhile, it has an agreement with Boeing to purchase 10 Next-Generation 737-800 aircraft, also in 2014 and 2015. That will effectively reducing the average age of WestJet's fleet by about a year, the airline said.

WestJet has also deferred the delivery of five Boeing Next-Generation 737-700 aircraft from 2014 and 2015 to 2016 and 2017.

"These agreements are part of our strategy to optimize and modernize our fleet mix, which will improve CASM (cost per available seat mile), while maintaining fleet flexibility going forward," Saretsky said.