Will Westjet suffer?

[Dangerous Goods]

Well, I have to ask. With all the buzz about a possible recession, what are people’s thoughts on Westjets future?

I see people speculating quite a bit regarding the possible outcome of AC during such a period, but how about WJ? Will they be any different?

I know Westjet continued its growth during 911 when all others could not but will it be the same this time? This will be the first recession that Westjet encounters, if there even is a recession, how do you think they will react?

[Flightlevels]

If it's coming, and I believe it is. I think this is about the best company to be at. We have our costs under control along with labor peace coupled with high profit margins new aircraft and a fair amount of cash in the bank.

Our flying isn't as vulnerable either. We only have 8% of the trans border (US)market. 1% of the Carribean and about 35% domestic. If the brunt of the recession is below the border we should fair well. Our growth will mostly be domestic and Carribean with only 5 to 8 % growth targeted for across the border. If that gets put on hold...that's not much flying imho and can be allocated somewhere else.

Another cycle is coming and I believe we have the right people running the show.

For fun sake, let's say everything goes in the toilet. The NG endorsement is one of the best in the world. Take a look at the job placement ad's on PARC or Rishworth for example.

I think WJ will do fine personally.

FL

[Dangerous Goods]

I think that's a reasonable rational. Thanks

So from reading your post, I gather its Westjet strong domestic routes that will allow you guys to continue with expansion? Or do you see Westjet slowing growth and expansion in the wake of a recession? I know it's way to early to predict this stuff...just a few thoughts to consider.

[VicMackey]

http://www.newratings.com/analyst_news/ ... 83946.html

[KAG]

I think were gonna do just fine. Even if the economy tanks, oil goes up - if were hurting, our competition will be even more so. Were in a much better position to survive and thrive in a economic downturn.

[Legacy]

I think its 700 million we have in the bank. Think we will do ok.

[Realitychex]

You forget about BC's Glen Clark induced recession in 1997-1998. Make no mistake about it, that was a recession. So much so that wags in Alberta named Clark "Alberta's Man of the Year".

At that time, virtually all WJ's traffic touched BC in one way or another.

Check out WJA's results in the period, (and remember why WJ's numbers were off in 1998...nothing to do with market forces, more to do with the very late delivery of an airplane from Santa Barbara Aerospace, and the cost of keeping a Spirit MD80 parked in YYC all summer long with a crew in hotels in the event WJ had an irop with its fleet and couldn't handle it due to the aircraft shortfall).

Well, I have to ask. With all the buzz about a possible recession, what are people’s thoughts on Westjets future?

I see people speculating quite a bit regarding the possible outcome of AC during such a period, but how about WJ? Will they be any different?

I know Westjet continued its growth during 911 when all others could not but will it be the same this time? This will be the first recession that Westjet encounters, if there even is a recession, how do you think they will react?

[Blastor]

Lots of Kool-Aid in the bowl. Nothing to worry about.
Pension plan is secured...ooops! No pension plan. Nevermind

Note: Don't drink the purple Kool-Aid. You'll end up doing the fire side chat!

[twinpratts]

See you in '09 loser .

[Flightlevels]

long time no see Blastie!

I'd be willing to bet you will feel a slowdown worse than us. Want to compare pensions?...btw my dad can beat up yours! (jk) You didn't piss me off but made me have a pleasant chuckle.

[Four1oh]

Don't you guys read? Blastor claims to have infiltrated the westjet ranks and is now one of us!

[Realitychex]

Lots of Kool-Aid in the bowl. Nothing to worry about.
Pension plan is secured...ooops! No pension plan. Nevermind

Note: Don't drink the purple Kool-Aid. You'll end up doing the fire side chat!

For those needing a refresher, here's what happened between 1991 and 1993. These are operating margins only, and don't include interest expense, which only makes the legacy numbers even uglier.
In the period, the big 11 airlines, (including AC north of the border, not including CAI), incurred cumulative operating losses of $4.1b and negative operating margins of -2.3%

The dominant LCC's had operating margins of 10.1% thru the period and operating profits of $537m.

Legacy revenues grew 10.1%, LCC revenues grew 42.8%.

LUV grew block hours by 33% , ASM's by 34% and RPM's by 49% in the period.

Interestingly, LUV's revenue in 1993 was about what WJA's is in 2007.

LCC's, ("cost" refers to cost structure, not to the fare charged), tend to be very resilient in times of economic hardship. Indeed, they thrive in these times. They use them to leapfrog their growth.

Those who cannot remember the past are condemned to repeat it.
George Santayana