STRONG EARNINGS FOR WESTJET, WHILE LOSSES NARROW AT AIR CANADA

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By TESTCustomwebLP TESTCustomwebLP August 5, 2011 11:53

STRONG EARNINGS FOR WESTJET, WHILE LOSSES NARROW AT AIR CANADA

WestJet reported yesterday that it more than tripled its second-quarter earnings to $25.6 million, or 18 cents a share, compared to a year ago. Fellow Canadian airline, Air Canada meanwhile narrowed its loss for the quarter to $46 million, or 20 cents a share. Although WestJet beat analysts’ estimates just, Air Canada fell short of the expected 17-cent loss, despite managing to achieve $475 million of the $530 million in cost and revenue improvements.

Higher ticket prices allowed WestJet to manage yields in order to offset higher fuel costs, according to the airline’s chief Gregg Saretsky. However he also warned that fuel costs will make it more difficult to achieve year-over-year growth in unit revenues.

Air Canada also benefited from the high fare environment but is also affected by the high cost of fuel, which Calin Rovinescu, Air Canada chief executive, estimate will add $800 million to 2011 costs.

“To mitigate the impact of this dramatic fuel-cost increase, we’re looking at additional cost opportunities beyond those identified through our cost transformation process, and where competitively feasible, we’ve increased fares and introduced fuel surcharges,” he said.

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By TESTCustomwebLP TESTCustomwebLP August 5, 2011 11:53
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