WestJet posts loss
Canadian Press
CALGARY — Discount airline WestJet Airlines Ltd. has reported its first quarterly loss in eight years on Tuesday, saying it lost $46.2-million in its fourth quarter on a $47.6-million writedown to replace early its fleet of 737-200 aircraft.
The Calgary-based discount airline said its loss for the three months ended Dec. 31 amounted to 37 cents per share and compares with a profit of $12.8-million, or 10 cents per share, in the final quarter of 2003.
Quarterly revenues increased to $273.7-million from $230.2-million. However, those gains were more than offset by the charge it took to retire its entire fleet of 18 Boeing 737-200 series aircraft during this year as it takes possession of 16 new, previously ordered, 737 planes.
However, other costs also increased at the airline. Expenses for aircraft fuel almost doubled to $75.9-million, while sales and marketing costs also increased.
For all of 2004, WestJet — which is facing intensifying competition and legal battles from a restructured Air Canada — lost $17.1-million, or 14 cents per share. WestJet made $60.5-million or 52 cents per share in 2003.
Full-year revenue rose to $1-billion from $863-million.
“We are obviously disappointed with our financial performance in the fourth quarter of 2004, as well as our performance during the rest of the year,” said president and CEO Clive Beddoe. “This was an extremely challenging year for our airline and for our industry as a whole as we had to deal with record high fuel prices, rising operating costs and fierce competition.”
Westjet posts first quarterly loss
Moderators: lilfssister, North Shore, sky's the limit, sepia, Sulako, I WAS Birddog
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golden hawk
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Westjet posts first quarterly loss
read this a little closer, still......
Wings get clipped at WestJet
By MATHEW INGRAM
Tuesday, February 15, 2005
Times have certainly changed for WestJet Airlines, the discount carrier that until recently was a bona fide superstar - a profitable, efficient and fast-growing carrier in an industry filled with bankrupt (or almost bankrupt) money-losers.
In the latest quarter, the pride of Calgary reported its first loss in two years, and its share price has tumbled by more than 35 per cent in the past year, as investors have started to question the company's ability to continue growing at double-digit rates.
The quarterly loss did have extenuating circumstances behind it, mind you. WestJet decided to accelerate the introduction of some new aircraft, and took a writedown on the old models that are being retired.
Even without this charge, however, the airline would have reported a loss, which isn't a great sign. The fact that WestJet is retiring some of its fleet is also further evidence of slowing growth, which is something that investors should keep in mind.
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Spiraldive
- Rank 2
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- Location: OGG
Blastor
I just Don't get you
What possible benefit could you get out of hating WJ so much?
Do you give no thought that the toes you step on today may be attached to the ass you kiss tomorrow? Or are you independantly wealthy and have no need to respect others?
Were you beaten as a child by a nanny that used to wear teal?
Not enough love from Mom and Dad?
This kind of compulsive beavior can be medicated.....I'm sure Dr. Phil could help.
Further try and write some of your own stuff. We read the papers too and have seen all that the media has to offer Yet some of us continue to drink the Koolaid.
I am sorry someone has hurt you perhaps you need a hug
I just Don't get you
What possible benefit could you get out of hating WJ so much?
Do you give no thought that the toes you step on today may be attached to the ass you kiss tomorrow? Or are you independantly wealthy and have no need to respect others?
Were you beaten as a child by a nanny that used to wear teal?
Not enough love from Mom and Dad?
This kind of compulsive beavior can be medicated.....I'm sure Dr. Phil could help.
Further try and write some of your own stuff. We read the papers too and have seen all that the media has to offer Yet some of us continue to drink the Koolaid.
I am sorry someone has hurt you perhaps you need a hug
"Hey pile it, you wanna hold my bottle?"
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complexintentions
- Rank 10
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- Location: of my pants is unknown.
Hey leftyxl,leftyxl wrote:Blastor
I just Don't get you
What possible benefit could you get out of hating WJ so much?
Do you give no thought that the toes you step on today may be attached to the ass you kiss tomorrow? Or are you independantly wealthy and have no need to respect others?
Were you beaten as a child by a nanny that used to wear teal?
Not enough love from Mom and Dad?
This kind of compulsive beavior can be medicated.....I'm sure Dr. Phil could help.
Further try and write some of your own stuff. We read the papers too and have seen all that the media has to offer Yet some of us continue to drink the Koolaid.
I am sorry someone has hurt you perhaps you need a hug
No point trying to talk to Blastor by making sense, trust me, I've tried. It's like talking to a turd that's stuck to the bottom of your shoe. You can wipe it off but you can just never get rid of the stench, which we all know as Blastor.
You could try to get the Globe and Mail to print something, then copy and paste it into the forum, he might read it then, if he can read.
But don't be too hard on him, he's been playing with himself in his basement, waiting for this day for 8 years.
I think we all knew this would happen to WJ some day soon...and it finally came. Guess there is no chance for the $9.00/hr check-in counter staff to get a company paid uniform now Instead they have to shell out their own dough for their own street clothing. And the 45k/yr pilots get one...go figure.
Gearup : You've got it!
Spiraldive:
Spiraldive:
Employee profit share provision:
The provision for employee profit share is estimated based on actual
year-to-date earnings results. The actual employee profit share
amount is to be determined by the Board of Directors based on audited
financial results at the completion of the financial year.
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complexintentions
- Rank 10
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- Location: of my pants is unknown.
??Gear Up wrote:I think we all knew this would happen to WJ some day soon...and it finally came. Guess there is no chance for the $9.00/hr check-in counter staff to get a company paid uniform now Instead they have to shell out their own dough for their own street clothing. And the 45k/yr pilots get one...go figure.
Pretty sure pilots pay for their own street clothing...and the least a company could give any pilot making 45k/yr is a uniform!
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Hun IN the SUN
- Rank 3
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- Location: In a HOLD
Rolling D Check
Hun IN the Sun,
You are correct, D checks are normally done in this fashion but not on WestJets NG aircraft. The advantage of the rolling D check is that the aircraft is not taken out of operation for any real significant ammount of time. As a result, the NG's are better utilized. This is not the case with the 200's however, which is another reason why they are more costly to keep.
You are correct, D checks are normally done in this fashion but not on WestJets NG aircraft. The advantage of the rolling D check is that the aircraft is not taken out of operation for any real significant ammount of time. As a result, the NG's are better utilized. This is not the case with the 200's however, which is another reason why they are more costly to keep.
WestJet posts Q4 loss; Beddoe cuts salary to $1
First losing quarter since 1996
Lisa Schmidt
Calgary Herald
Wednesday, February 16, 2005
WestJet Airlines Ltd. snapped its string of profitable quarters Tuesday, spurring its chief executive to slash his salary to $1 as the discount carrier posted its first loss since it began in 1996.
Soaring fuel costs, reservation system problems and losses on new U.S. routes pushed WestJet into the red -- even before a $47.6-million writedown to replace older, fuel-guzzling jets faster than planned.
The dismal results capped a tumultuous year for WestJet, which faced tough competition from a renewed Air Canada and discount rivals Jetsgo and Canjet that has lowered air fares for consumers. The carrier also remains locked in a legal battle with Air Canada and Jetsgo over corporate espionage allegations.
"This was an extremely challenging year for our airline and for our industry as a whole as we had to deal with record fuel prices, rising operating costs and fierce competition," Beddoe said.
The $46.3 million loss amounted to 37 cents a share in the fourth quarter, compared with $12.8 million profit, or 10 cents a share, in the corresponding period in 2003.
After trumpeting 31 consecutive quarters of profitability, Beddoe called the loss disappointing and said he would chop his salary to $1 for the coming year, following precedents set by chief executives at some struggling companies.
"It's usually a signal of pain to come," said Doug Reid, a business professor at Queen's University in Kingston.
Still, Beddoe's stake in WestJet -- about 4 million shares as of April 2004 -- is worth roughly $50 million. In 2003, Beddoe's salary was $220,000, plus a $105,000 bonus and $285,000 in other compensation. He also had $2.3 million in stock options yet to be exercised.
Reid noted Beddoe's move was a stark contrast from Air Canada, when chief executive Robert Milton stood to gain a $20-million bonus while the airline conducted massive layoffs as part of its restructuring last year.
WestJet will also have to watch employee morale, now dealt two big blows with Air Canada's lawsuit and the airline's loss, which means no profit-sharing cheques this year, Reid added.
"It's not a magic formula anymore . . . There really is a lot of hard work involved in this and it's not just simply of showing up and saying we're better than Air Canada," he said.
For the year, the airline lost $17.2 million, down from earnings of $60.5 million in 2003. Revenues rose 26 per cent to $1.06 billion.
Without the charge for the older planes, announced last Friday, the company had expected a $14.9-million loss during quarter and an $18.4-million profit for the year.
The results surprised some analysts, who had expected a break-even quarter. On Tuesday, shares of the stock fell 45 cents to $12.20 on the Toronto stock exchange. The shares are down about 30 per cent over the past 12 months.
WestJet could be in for a tough year, said one analyst who lowered his rating to neutral from buy after the airline's dismal results.
"We think it could be at least several quarters before WestJet regains its lustre," Merrill Lynch's Michael Linenburg said in a research note.
WestJet said the pace of growth will slow to about 17 per cent this year, compared to 30 per cent in 2004. But the airline will become more aggressive on pricing, adding more low-end fares in markets to fill more seats on its planes.
"We've already started it and you'll see it stepped up," Beddoe said, noting the airline sold more discount seats in the fourth quarter -- 59 per cent compared to 54 per cent a year ago.
However, the extremely competitive environment raises questions about the viability of carriers such as Jetsgo and CanJet, which are private companies and do not release financial results.
"If WestJet is losing money and given their cost structure, one has to assume that the other competitors in the domestic market are also losing money," said Cameron Doerksen, an analyst with Dlouhy Merchant Group in Montreal.
"And how sustainable that is for them is open to debate."
During the fourth quarter, WestJet's fuel costs rose 20 per cent as oil prices remained at record levels. The airline also faced higher airport and navigation fees.
Retirement of the older jets is expected to save about $30 million annually on fuel and maintenance costs, WestJet said.
A problem with the airline's booking system cut ticket sales in October and November, costing WestJet as much as $20 million during the quarter.
WestJet's new U.S. destinations lost $5 million during the quarter as the launch of Florida routes was marred by hurricanes and the lack of an American distribution system hurt ticket sales. However, Beddoe said 80 per cent of routes were now showing a profit.
First losing quarter since 1996
Lisa Schmidt
Calgary Herald
Wednesday, February 16, 2005
WestJet Airlines Ltd. snapped its string of profitable quarters Tuesday, spurring its chief executive to slash his salary to $1 as the discount carrier posted its first loss since it began in 1996.
Soaring fuel costs, reservation system problems and losses on new U.S. routes pushed WestJet into the red -- even before a $47.6-million writedown to replace older, fuel-guzzling jets faster than planned.
The dismal results capped a tumultuous year for WestJet, which faced tough competition from a renewed Air Canada and discount rivals Jetsgo and Canjet that has lowered air fares for consumers. The carrier also remains locked in a legal battle with Air Canada and Jetsgo over corporate espionage allegations.
"This was an extremely challenging year for our airline and for our industry as a whole as we had to deal with record fuel prices, rising operating costs and fierce competition," Beddoe said.
The $46.3 million loss amounted to 37 cents a share in the fourth quarter, compared with $12.8 million profit, or 10 cents a share, in the corresponding period in 2003.
After trumpeting 31 consecutive quarters of profitability, Beddoe called the loss disappointing and said he would chop his salary to $1 for the coming year, following precedents set by chief executives at some struggling companies.
"It's usually a signal of pain to come," said Doug Reid, a business professor at Queen's University in Kingston.
Still, Beddoe's stake in WestJet -- about 4 million shares as of April 2004 -- is worth roughly $50 million. In 2003, Beddoe's salary was $220,000, plus a $105,000 bonus and $285,000 in other compensation. He also had $2.3 million in stock options yet to be exercised.
Reid noted Beddoe's move was a stark contrast from Air Canada, when chief executive Robert Milton stood to gain a $20-million bonus while the airline conducted massive layoffs as part of its restructuring last year.
WestJet will also have to watch employee morale, now dealt two big blows with Air Canada's lawsuit and the airline's loss, which means no profit-sharing cheques this year, Reid added.
"It's not a magic formula anymore . . . There really is a lot of hard work involved in this and it's not just simply of showing up and saying we're better than Air Canada," he said.
For the year, the airline lost $17.2 million, down from earnings of $60.5 million in 2003. Revenues rose 26 per cent to $1.06 billion.
Without the charge for the older planes, announced last Friday, the company had expected a $14.9-million loss during quarter and an $18.4-million profit for the year.
The results surprised some analysts, who had expected a break-even quarter. On Tuesday, shares of the stock fell 45 cents to $12.20 on the Toronto stock exchange. The shares are down about 30 per cent over the past 12 months.
WestJet could be in for a tough year, said one analyst who lowered his rating to neutral from buy after the airline's dismal results.
"We think it could be at least several quarters before WestJet regains its lustre," Merrill Lynch's Michael Linenburg said in a research note.
WestJet said the pace of growth will slow to about 17 per cent this year, compared to 30 per cent in 2004. But the airline will become more aggressive on pricing, adding more low-end fares in markets to fill more seats on its planes.
"We've already started it and you'll see it stepped up," Beddoe said, noting the airline sold more discount seats in the fourth quarter -- 59 per cent compared to 54 per cent a year ago.
However, the extremely competitive environment raises questions about the viability of carriers such as Jetsgo and CanJet, which are private companies and do not release financial results.
"If WestJet is losing money and given their cost structure, one has to assume that the other competitors in the domestic market are also losing money," said Cameron Doerksen, an analyst with Dlouhy Merchant Group in Montreal.
"And how sustainable that is for them is open to debate."
During the fourth quarter, WestJet's fuel costs rose 20 per cent as oil prices remained at record levels. The airline also faced higher airport and navigation fees.
Retirement of the older jets is expected to save about $30 million annually on fuel and maintenance costs, WestJet said.
A problem with the airline's booking system cut ticket sales in October and November, costing WestJet as much as $20 million during the quarter.
WestJet's new U.S. destinations lost $5 million during the quarter as the launch of Florida routes was marred by hurricanes and the lack of an American distribution system hurt ticket sales. However, Beddoe said 80 per cent of routes were now showing a profit.
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shitdisturber
- Rank 10
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- Joined: Tue Feb 17, 2004 3:38 pm
- Location: If it's Monday it's got to be somewhere shitty
How many million did Uncle Miltie take while putting the company in bankruptcy protection?Blastor wrote: WestJet Airlines Ltd. snapped its string of profitable quarters Tuesday, spurring its chief executive to slash his salary to $1 as the discount carrier posted its first loss since it began in 1996.
I’m no fan of Milton but the facts are quite different. I think you should be asking how much Clive has made off his WJ shares. Wasn’t it around 50 million or so? Actually I thought I read that Clives's total profit package so far was around 150 million but who's counting.
There are going to be no winners in this new price war albeit only the consumer in the short term. The big losers will be all the airline employees…Name one other industry that sells its product below cost and remains in business.
There are going to be no winners in this new price war albeit only the consumer in the short term. The big losers will be all the airline employees…Name one other industry that sells its product below cost and remains in business.
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shitdisturber
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The difference being that it's the value of the shares Beddoe holds; it doesn't say anything about him having sold them off. At least he's put his money where his mouth is and taking a hit in salary due to the loss of value of shares. If memory serves, Miltie took his large salary and bonuses while forcing roll backs on everybody else. Given that everybody at the upper end of business is out to screw the little guy; and I'm not arguing that point, it seems that Beddoe at least has some shred of decency and integrity left. Would that we could say the same for Milton.
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motherfokker
- Rank 2
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thats it the end is near Jetsgone is about to take over.
