WestJet reports June traffic results and updates second quarter outlook

Airline increases traffic by 7.0 per cent year over year and improves on-time performance to 89.4 per cent

CALGARY, July 7, 2015 /PRNewswire/ - WestJet today announced June 2015 traffic results with a load factor of 76.9 per cent, a decrease of 0.5 percentage points year over year. Revenue passenger miles (RPMs), or traffic, increased 7.0 per cent year over year with a more aggressive mix of lower fares, and capacity, measured in available seat miles (ASMs), was 7.6 per cent higher over the same period. WestJet achieved an on-time performance rate of 89.4 per cent in June, an improvement of 3.7 percentage points year over year. In the second quarter of 2015, the airline achieved a load factor of 78.1 per cent, a decrease of 1.5 percentage points year over year, and flew a record 5.0 million guests, a year-over-year increase of 3.9 per cent or approximately 184,000 additional guests.

"We are pleased with our traffic growth in the second quarter and are committed to keeping our costs low in order to provide affordable air travel for our guests," said WestJet President and CEO Gregg Saretsky. "I want to thank all WestJetters for their commitment to improving our on-time performance while continuing to provide our guests with the friendly caring service for which WestJet is known."

June 2015 traffic results

WestJet today provided an update to its outlook for the second quarter of 2015. While continuing to expect year-over-year margin expansion and record net earnings for a second quarter, the airline now expects:

• As a result of a substantively enacted increase in the Alberta provincial corporate income tax rate from 10 to 12 per cent, WestJet expects its effective tax rate for the full year 2015 to be 29 to 30 per cent, as compared to its previous guidance of 27 to 28 per cent. For the second quarter of 2015, WestJet expects its effective tax rate to be approximately 31 per cent;
  
  
• RASM to be down approximately 5.7 per cent year over year, as compared to its previous guidance of a moderate year-over-year decline, with the difference primarily driven by a more aggressive mix of lower fares during the quarter and higher than expected ASMs;
  
  
• CASM, excluding fuel and profit share to be up approximately 0.5 per cent year over year, as compared to its previous guidance of up 2.0 to 2.5 per cent, with the difference primarily driven by lower than expected airport operating costs and lower marketing, general and administration expenses, as well as higher than expected ASMs; and
  
  
• Fuel cost per litre to be approximately 69 cents, at the high end of its previous guidance of 67 to 69 cents.

The outlook information provided above is a preliminary estimate only, is subject to completion of WestJet's quarterly financial close processes and has not been reviewed by the Company's auditors. Please see below for a cautionary statement with respect to the use of forward-looking information. WestJet does not intend to provide updates to guidance in future periods, except as may be required by law.

In the second quarter, WestJet launched non-stop service on several new routes. WestJet Encore began non-stop service between Toronto and Fredericton, NB on April 15, 2015 and between Calgary and Terrace, BC on May 3, 2015. WestJet also began non-stop service between Calgary and Yellowknife, NT as well as Toronto and Gander, NL on May 3, 2015 and between Halifax and Glasgow, Scotland on May 29, 2015.

In June, WestJet announced that it had selected London, England as the first transatlantic destination for its wide-body Boeing 767-300ERW aircraft, with service from Canada through London Gatwick beginning in the spring of 2016. Gatwick provides WestJet guests with easy access to central London, as well as connectivity to other low-cost airlines with service to destinations in Europe and beyond. Further announcements on schedules, pricing and launch cities will be communicated later this summer, with service commencing in spring 2016.

Caution regarding forward-looking information
This news release  contains forward-looking information, some of which that may constitute a financial outlook, as defined under applicable Canadian securities legislation, including without limitation, with respect to the following: WestJet's expectation of continued year-over-year margin expansion and record net earnings for the second quarter; WestJet's expectation of an effective tax rate of 29 per cent to 30 per cent for the full year 2015 and approximately 31 per cent for the second quarter of 2015; the expectation that WestJet's second-quarter 2015 RASM will be down approximately 5.7 per cent, year over year; WestJet's expectation that 2015 second-quarter CASM, excluding fuel and employee profit share, will be up approximately 0.5 per cent year over year; the expectation that WestJet's second-quarter 2015 fuel cost per litre will be approximately 69 cents; and WestJet's plans to operate its wide-body Boeing 767-300ERW aircraft to London Gatwick beginning in the spring of 2016 and the timing of further announcements on schedules, pricing and launch cities. The forward-looking information, including any financial outlook, contained in this news release, is provided to assist investors in understanding our assessment of WestJet's future plans, operations and expected results. The forward-looking information may not be appropriate for other purposes and is expressly qualified by this cautionary statement.

By its nature, forward-looking information is subject to numerous risks and uncertainties including, but not limited to, the impact of general economic conditions, changing domestic and international airline industry conditions, volatility of fuel prices, currency fluctuations, interest rates, competition from other airline industry participants (including new entrants, capacity fluctuations and changes to the pricing environment), labour matters, government regulations, stock market volatility, the ability to access sufficient capital from internal and external sources, and additional risk factors discussed in documents WestJet files from time to time with securities regulatory authorities, which are available on SEDAR at sedar.com or, upon request, without charge from the Company. Readers are cautioned that undue reliance should not be placed on forward-looking information as actual results may vary materially from the forward-looking information. The forward-looking information contained in this news release is qualified by the assumptions that are stated or inherent in such forward-looking information and represent WestJet's expectations as of the date of this news release, and are subject to change after such date. 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.

Non-GAAP measures
This news release contains disclosure respecting non-GAAP financial measures including, without limitation, CASM, excluding fuel and employee profit share. Non-GAAP measures are included to enhance the overall understanding of WestJet's 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 reporting periods. These measures are not calculated in accordance with, or an alternative to, GAAP 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 "Reconciliation of non-GAAP and additional GAAP measures" in WestJet's management's discussion and analysis of financial results for the quarter ended March 31, 2015, which is available on SEDAR at sedar.com, for a further discussion of such non-GAAP measures.

About WestJet
We are proud to be Canada's most-preferred airline, powered by an award-winning culture of care and recognized as one of the country's top employers. We offer scheduled service to more than 90 destinations in North America, Central America, the Caribbean and Europe. Through our regional airline, WestJet Encore, and with partnerships with airlines representing every major region of the world, we offer our guests more than 120 destinations in more than 20 countries. Leveraging WestJet's extensive network, flight schedule and remarkable guest experience, WestJet Vacations delivers affordable, flexible travel experiences with a variety of accommodation options for every guest. Members of our WestJet Rewards program earn WestJet dollars on flights, vacation packages and more. Our members use WestJet dollars towards the purchase of WestJet flights and vacation packages on any day, at any time, to any WestJet destination with no blackout periods  ̶  even on seat sales. For more information about everything WestJet, please visit westjet.com.

Recent recognition includes:
2015 Best Employers in Canada (Aon Hewitt)
2014 Interbrand Canada's Best Canadian Brands (Rank #20)
2014 Brands of the Year (Strategy magazine)
2014 Canada's Most Preferred Airline (Ipsos)
2014 Value Airline of the Year (Air Transport World magazine)
2014/2013/2012 Canada's Most Attractive Employer (Randstad)
2014/2013 WestJet RBC MasterCard ranked #1 in Canada (Money Sense magazine and RewardsCanada.ca`)
2014/2013/2012/2011 Highest equity score: airline, vacation package supplier brands (Harris/Decima EquiTrend Study)

Connect with WestJet on Facebook at facebook.com/westjet
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SOURCE WestJet

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