CALGARY — Discount carrier WestJet Airlines Ltd. is reporting a sharp increase in passenger traffic, with a 39.9 per cent gain in February from a year earlier.
WestJet said Thursday that revenue passenger miles, or the number of paid-for seats multiplied by the distance they flew, rose last month to 597.8 million — up from 427.3 million in February 2004.
Year-to-date, its revenue passenger miles improved 35.5 per cent to 1.2 billion from 895 million in the same period in 2004.
The Calgary-based airline said its February load factor, or proportion of seats filled, increased to 72.9 per cent from 67.4 per cent in February 2004.
Year-to-date, its revenue passenger miles improved 35.5 per cent to 1.2 billion from 895 million in the same period in 2004.
The Calgary-based airline said its February load factor, or proportion of seats filled, increased to 72.9 per cent from 67.4 per cent in February 2004.
“Achieving a load factor increase is particularly significant for a growing airline,” WestJet said in a release.
“Not only were a larger percentage of WestJet's available seats filled in February 2005, compared to February 2004, but there were also 29.3 per cent more seats to fill.”
Available seat miles grew 29.3 per cent to 820.5 million.
I'd be willing to bet those increased load factors are partly due to their dropping fares to match JetsGo. I haven't reviewed AC's LF's lately to perhaps corroborate that, since they too seem to be pricing in lockstep. A better indicator of whether this is positive or not, would be figures that indicate the YIELD...not available to the general public.
It doesn't matter if the seats are filled if you aren't making a profit on them. Sh$t, I could start an airline and give seats away, thus ensuring near 100% load factors...doubtful most accountants would be impressed though.
It comes down to seat costs per mile. WestJet is extremely efficient to be sure, but I'm not convinced they're not getting "out-low-costed" by JetsGo...
Hi complex, good points, I have heard that yields are increasing for wj on most runs with the new system in place. The states in particular. I would be surprised if a profit is made in the quarter though. Having said this I think the being out low costed is coming to and end in light of jetsgo announcing more employees per a/c and with a huge disadvantage on an older fleet no hedge that was sold off and with fuel flirting with53 dollars, well you can draw your own conclusions. There will no doubt be a price war going on for some time but it concerns me when even leblanc has stated he isn't making money. So why price like this then? Consumers will benifit huge by the new fares and heck this is even why Blastor started hating WJ over the increase in fares. Now maybe he can travel cheaper again...lol. There is no more price stimulation in the low cost operators consumers have become use to low fares, now the WJ ers have to reel in consumer loyalty through a safe clean well oiled product. My conclusion, WJ has the best chance of weathering this storm.
I agree, WJ has the best chance of weathering the storm. This industry does not always follow logic though, as there are always political shenanigans going on in the background. And they will certainly not be the ONLY company to weather the storm, as much as WestJetters might like to dream it so.
I respecfully disagree though, that JetsGo is at a "huge disadvantage" cost-wise though, and am inclined to believe they may actually enjoy the opposite. WestJet too, no longer has hedged fuel to the degree they once did. Fuel and employee wages are usually the majority of an airline's costs, and I really don't see a big disparity between the two companies. The one glaring difference I DO see, potentially, is a/c acquisition costs. Perhaps it really does cost so much more per hour to operate a F100 than a -700, but it would have to cost an absolutely incredible amount more to compensate for the cost of leasing a brand new NG Boeing.
Time will tell, but I think it could be more than a quarter or two before WestJet can start to string together consecutive profitable quarters again.
Hi complex, if the md/fokker is anything like the 200 on burn alone it loses to the 700. Yes fuel is number one followed by wages. Wj isn't that much further ahead by wages on base pay. The 700 burns approx 3700lbs at altitude/hr and I think if I remember right/ the 200 is around 5000.(correct me if I'm wrong) that alone is significant. Insurance is another example. Fokker isn't around anymore. Thus parts are made by a third party and leftovers from original tooling. Insurance is the highest in the world on these airplanes because fokker isn't around to stand behind any faulty parts etc.. Next is training we have our own sims that are paid for. Maintainance is about 100/hr on the owned 700's about 800/ leased ones and the 200's are in the 3500/hr range. If this is close to the MD's or fokkers that go through more cycles in the short hauls...well they lose there too. Aquisition costs are low as they have all been paid already for the 200 aquisition with Cash on hand no borrowed for the replacement of the 200's. WJ still has over 150 million in cash on hand in the bank with all the big ticket items done for this year. I feel it should be a very positive 2nd and 3rd quarter.
The F100 burns roughly 2000lbs per side in the high levels.
And Allthough the aircraft manufacturing division closed, the parts production did not. They are still operating in full scale supporting the F50, 70 and 100.
The F100 burns roughly 2000lbs per side in the high levels.
And Allthough the aircraft manufacturing division closed, the parts production did not. They are still operating in full scale supporting the F50, 70 and 100. If you do some reseach you will see that F70's and F100's are a poular choice in Europe and to a certain extent in South America as it has proven to be a great regional airliner with only the A318/A319 in it's class at a much higher price. At AA the F100 became a victim of streamlining the fleet, as they are sticking with Boeing and Airbus at the mainline.
Flight levels you make some excellent points but missing some key elements. First off you have to compare apples to apples.
I do agree with your fuel burn, but that fuel burn is at 41000 with a light aircraft. So lets take a mid weight for both the MD and the -700 of 130,000lbs. The fuel burn for the MD would be 6700lbs an hour. The fuel burn for the -700 would be 4900 lbs an hour. The -700 carries 136 pax, the MD carries 160 pax. The fuel per pax per hour would be 42 pounds for the MD and 36 pounds for the -700. The difference is not as substantial as most may think but the advantage is on WJ's side.
Maint costs. The -700 is 100 per hr for aircraft that you own. For aircraft that you lease it is 300 per hour. Your fleet is increasingly becoming leased. The MD should be around 700 per hour but I think the lack of preventative maint is starting to cost SG and I think it is more like 1000 per hour. Advantage is again WJ
Cost of aircraft. I am not sure of the lease rates of the -700 but it would most likely be around 300,000 per month. The MD's have various rates but would average around 50,000 per month. SG's utilazation of the MD fleet is just over 10 hrs per day, and I will assume WJ's is the same. That will equal a lease rate of $167 per hour for the MD and $1000 per hour for the -700. Advantage to SG.
Landing fees, gate fees, ATC arrival/departure fees and enroute fees are weight based (based on maximum takeoff weight) so the difference between the 2 are slight.
Another fee is catering. It might not seem like much to give a cookie and a couple of pops to pax for free but if it costs $2 per pax per flight that would add over $250 per flight where SG charges for everything.
Rates of pay. The pay scale is close, within $50 per flight hour but SG's pay is based on 90 hrs per month, I believe yours is based on 75 per month which tips the scale again to SG being cheaper.
All in all the costs are close but SG should have a 10-15% savings over WJ. That percentage will change the most with the price of fuel.
There are several other costs to consider like office staff, office space, supplies, suppliers, advertising. etc...that I have no clue about..all I know is that SG runs as thin as it can..which bites us in the ass from time to time.
I don't think they still make parts for the Fokkers but they do overhaul them. I do know my friends have complained on many occasions about the lack of parts, but seem to think it will get better once the 2 slated for parts are fully stripped. They are able to rob some from the a/c in check at Nordtech as well, until they are ready for service.
I saw 2 spare F-100 engines in the Exceltech hangar and a small SG stores. In time parts will be more readily available I'm sure.
