News Releases

Airline achieves EPS of 18 cents, up from 5 cents in the second quarter of 2010

CALGARY, Aug. 4, 2011 /CNW/ - WestJet (TSX:WJA) today reported second quarter 2011 net earnings of $25.6 million, or 18 cents per share, which is up significantly from the net earnings of $6.8 million and 5 cents per share reported in the second quarter of 2010. These financial results mark WestJet's 25^th consecutive quarter of profitability.

"A strong pricing environment allowed us to manage our yield in the second quarter to offset the elevated cost of fuel," said WestJet President and CEO Gregg Saretsky. "We saw improvements in our key operational metrics this quarter and also kept our controllable costs in check which contributed to our strong results."

Operating highlights (stated in Canadian dollars)

*Financial information has been restated in accordance with International Financial Reporting Standards (IFRS).
**Refer to reconciliations in the accompanying tables for further information regarding adjustments.

In the second quarter of 2011, WestJet launched four new interline relationships and increased the number of city pairings available through its code-share arrangement with American Airlines. "As we expand our reach and welcome aboard new guests, I thank WestJetters for the genuine level of care they continue to display. Even the small things like a friendly smile and a warm welcome add to an already great guest experience and contribute to our airline's overall success. Their hard work helped deliver the net earnings per guest of $6.50 that we achieved this quarter," commented Gregg Saretsky.

WestJet anticipates continued year-over-year RASM growth for the third quarter of 2011 based on advanced bookings. However, this year-over-year growth is expected to come at a moderated pace versus that seen during the first half of 2011 since the pricing environment was more robust during the second half of 2010 as compared to the first half of 2010.

For the third quarter of 2011, WestJet is projecting fuel costs, excluding hedging, to range between $0.90 and $0.93 per litre. The airline expects the third quarter CASM, excluding fuel and employee profit share, to be slightly up year over year and the full year 2011 CASM, excluding fuel and employee profit share, to remain flat compared to the prior year. "Inflated fuel prices present a challenge to the airline industry, but our low-cost structure and proven business model have us well positioned to succeed going forward," concluded Gregg Saretsky.

Dividend declaration
WestJet's Board of Directors declared a cash dividend of $0.05 per common voting share and variable voting share for the third quarter of 2011, to be paid on September 30, 2011, to shareholders of record on September 14, 2011. All dividends paid by WestJet are, pursuant to subsection 89(14) of the Income Tax Act, designated as eligible dividends, unless indicated otherwise. An eligible dividend paid to a Canadian resident is entitled to the enhanced dividend tax credit.

Caution regarding forward-looking statements
Certain information set forth in this news release, including, without limitation, the information regarding second quarter fuel costs, RASM growth in the third quarter of 2011, and expected CASM in the third quarter and full year of 2011, is forward-looking information within the meaning of applicable Canadian securities laws. By its nature, forward-looking information is subject to numerous risks and uncertainties, some of which are beyond WestJet's control. The forward-looking information contained in this news release is based on WestJet's current budget and forecasts, realized jet fuel prices for July 2011 and forward curve prices for August and September 2011, the expected exchange rate of the Canadian dollar to the U.S. dollar in the third quarter of 2011, along with available implementation plans, agreements and bookings, but may vary due to factors including, but not limited to, changes in consumer demand, changes in fuel prices, delays in aircraft delivery, changes in guest demand, general economic conditions, competitive environment, ability to effectively implement and maintain critical systems and other factors and risks described in WestJet's public reports and filings including WestJet's management's discussion and analysis and annual information form for the year ended December 31, 2010, which are available under WestJet's profile at www.sedar.com. Readers are cautioned that undue reliance should not be placed on forward-looking statements as actual results may vary materially from the forward-looking information. WestJet does not undertake to update, correct or revise any forward-looking information as a result of any new information, future events or otherwise, except as may be required by applicable law.

This news release contains disclosure respecting non-IFRS performance measures including, without limitation, net earnings per guest, and CASM, excluding fuel and employee profit share. These measures are included to enhance overall understanding of WestJet's current financial performance and to provide an alternative method for assessing WestJet's operating results in a manner that is focused on the performance of WestJet's ongoing operations, and to provide a more consistent basis for comparison between quarters. These measures are not in accordance with, or an alternative to, IFRS and do not have standardized meanings. Therefore, they may not be comparable to similar measures provided by other entities. Readers are urged to review the section entitled "Non-IFRS Measures" in WestJet's management's discussion and analysis of financial results for the three and six months ended June 30, 2011, which is available under WestJet's profile on SEDAR at www.sedar.com, for a further discussion of such non-IFRS measures and a reconciliation of such measures to IFRS.

Management's discussion & analysis of financial results and the condensed consolidated interim financial statements and notes for the three and six months ended June 30, 2011, are available through the Internet in the Media and Investor Relations section of www.westjet.com or under WestJet's SEDAR profile at www.sedar.com.

Analyst conference call

WestJet will hold its quarterly analysts' conference call today, August 4, 2011, at 9 a.m. MDT (11 a.m. EDT). President and CEO Gregg Saretsky and Executive Vice-President of Finance and CFO Vito Culmone will discuss WestJet's second quarter 2011 results and answer questions from financial analysts and members of the media. The conference call is available in Toronto by calling 1-647-427-7450 and outside Toronto through the toll-free telephone number 1-888-231-8191. The call can also be listened to through an Internet webcast in the Media and Investor Relations section of www.westjet.com.

About WestJet
WestJet is Canada's favourite airline, offering scheduled service throughout its 71-city North American and Caribbean network. Inducted into Canada's Most Admired Corporate Cultures Hall of Fame and named one of Canada's best employers, WestJet pioneered low-cost flying in Canada. Named a J.D. Power 2011 Customer Service Champion, WestJet offers increased legroom, leather seats and live seatback television provided by Bell TV on its modern fleet of 96 Boeing Next-Generation 737 aircraft. With future confirmed deliveries for an additional 39 aircraft through 2018, WestJet strives to be one of the five most successful international airlines in the world.

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Consolidated Statement of Earnings
(Stated in thousands of Canadian dollars, except share and per share amounts)
(Unaudited)

Consolidated Statement of Financial Position 
(Stated in thousands of Canadian dollars)
(Unaudited)

Consolidated Statement of Cash Flows 
(Stated in thousands of Canadian dollars)
(Unaudited)

Operating Highlights
(Unaudited)

CASM, excluding fuel and employee profit share
(Stated in thousands of Canadian dollars, except per unit data)
(Unaudited)

WestJet excludes the effects of aircraft fuel expense and employee profit share expense to assess the operating performance of the business. Fuel expense is excluded from operating results due to the fact that fuel prices are impacted by a host of factors outside WestJet's control, such as significant weather events, geopolitical tensions, refinery capacity and global demand and supply. Excluding this expense allows WestJet to analyze its operating results on a comparable basis. Employee profit share expense is excluded from operating results due to its variable nature and excluding this expense allows greater comparability.

Net earnings per guest
(Stated in thousands of Canadian dollars, except per unit data)
(Unaudited)

WestJet believes that the measure of net earnings per guest provides useful information to investors about unit profit.