Westjet 1999 Annual Report Download

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WestJet Airlines 1999 Annual Report
Embracing
the Future!

Table of contents

  • Page 1
    Embracing the WestJet Airlines 1999 Annual Report Future!

  • Page 2
    ...31, 1999, WestJet flew sixteen Boeing 737-200 jet aircraft to twelve cities across western Canada including Victoria, Vancouver, Abbotsford/Fraser Valley, Kelowna, Prince George, Grande Prairie, Edmonton, Calgary, Regina, Saskatoon, Winnipeg and Thunder Bay. At the end of 1999, WestJet employed 1089...

  • Page 3
    ...to Shareholders Management's Discussion and Analysis Auditors' Report to the Shareholders Financial Statements Notes to Financial Statements Corporate Information Operating Highlights Revenue passenger miles Available seat miles Load factor Yield per revenue passenger mile (cents) Passenger revenue...

  • Page 4
    Message to Shareholders Stephen Smith, President and Chief Executive Officer. WestJet Airlines 2 1999 Annual Report

  • Page 5
    ...the corporate culture and low-fare strategy that have made us so successful over the past four years. November 30. In 1999 WestJet added three permanent destinations - Thunder Bay, Ontario, Prince George, British WestJet the Future! WestJet became a public company through an Initial Public Offering...

  • Page 6
    ... of our Internet website which is anticipated to provide substantial savings in our distribution costs as our airline expands. Though WestJet has a competitive advantage due to our exceptional customer service levels in our call center, and our strong relationships with our travel agent partners, we...

  • Page 7
    ... congestion and better accessibility compared to the Toronto Pearson Airport, we were able to move quickly to add service there before the startup of any other discount carrier. By the end of September 2000, we will be providing service to Ottawa, Ontario, Montreal, Quebec and Moncton, New Brunswick...

  • Page 8
    Management's Discussion & Analysis Members of WestJet's Kelowna Airport Team: Lori-Rae, Darci, Debb and Jennifer. WestJet Airlines 6 1999 Annual Report

  • Page 9
    ... its fourth year of operations with steady growth and (for a total service fleet to of the 16), new WestJet issued 2,750,000 common shares for net proceeds of $25.0 million in its oversubscribed initial public offering, and commenced trading under the symbol WJA on the Toronto Stock Exchange. In...

  • Page 10
    ...scheduled service and as in 1998, with 95% of its total revenue being derived from domestic operations. WestJet also has a number of contracts with major Canadian tour companies for off-peak hour charters flying to southwestern USA destinations, providing improved aircraft utilization and a positive...

  • Page 11
    ...On a unit basis, costs per available seat mile rose by 10% from 12.6 cents to 13.9 cents. Adjusted for Nav Canada fees and employee profit sharing, WestJet's total unit costs actually only Flight Attendants Trish and Christine providing WestJet's snack and beverage service. increases and surcharges...

  • Page 12
    ... cost increases in the categories of Reservations, Flight Operations, and Inflight, where salaries, wages, and benefits are the largest single category of expenditure. The employee share purchase plan, under which the corporation matches up to 20% of an employee's pay that is used to purchase shares...

  • Page 13
    ... of the spare aircraft fleet plan as well as the 1998 and early 1999 debt and lease financing arranged for the airplanes added during 1999. A further analysis where interest income earned on the cash reserves generated from the mid-year share issue is factored against those ownership costs, the unit...

  • Page 14
    ...the opportunity to secure and build its future by embarking on a long-range fleet plan and negotiations with manufacturers and lessors for the transition out of the Boeing 737-200 in favor of new generation aircraft. WestJet selected the Boeing 737 new generation jets. In addition to the operational...

  • Page 15
    ..., the financial position of the Corporation as at December 31, 1999 and 1998 and the results of its operations and its cash flows for the years then ended in accordance with Canadian generally accepted accounting principles. WestJetter Kevin of our Flight Operations team. W e have audited the...

  • Page 16
    Financial Statements Flight Attendants Deanna and Marla, along with First Officer Don and Captain Roger, outside a WestJet 737. WestJet Airlines 14 1999 Annual Report

  • Page 17
    ... ticket sales Non-refundable passenger credits Current portion of long-term debt (note 4) Current portion of obligations under capital lease (note 5) Long-term debt (note 4) Obligations under capital lease (note 5) Deferred income tax Shareholders' equity: Share capital (note 6) Obligation to issue...

  • Page 18
    ... other Expenses: Passenger services Maintenance Aircraft fuel Sales and marketing Reservations General and administration Flight operations Inflight Employee profit share provision Aircraft leasing Depreciation Earnings from operations Non-operating income (expense): Interest income Interest expense...

  • Page 19
    ...356) (4,195) (96) 33,923 Investments: Aircraft additions Other capital asset additions Other capital asset disposals Net change in cash Cash, beginning of year Cash, end of year Cash is defined as cash and short-term investments. See accompanying notes to financial statements. $ (39,318) (5,350) 206...

  • Page 20
    Notes to Financial Statements WestJet Airlines 18 1999 Annual Report

  • Page 21
    ... Deferred costs: Sales and marketing and reservation expenses attributed to the advance ticket sales are deferred and expensed in the period the related revenue is recognized. Included in prepaid expenses are $1,169,000 (1998 - $873,000) of deferred costs. WestJet Airlines 19 1999 Annual Report

  • Page 22
    ... the remaining useful service life of the aircraft. All other maintenance costs are expensed as incurred. 2. Capital assets: 1999 Aircraft Spare engines and parts Computer hardware and software Computer hardware under capital lease Equipment Leasehold improvements $ Basis Flight hours Straight-line...

  • Page 23
    ...-term assets are pre-payments of premiums for long-term contracts with fuel suppliers of $3,333,000, deposits on long-term operating lease agreements of $603,000, and a loan to an officer of the Corporation of $195,000. The loan to an officer of the Corporation is unsecured and noninterest bearing...

  • Page 24
    ... Corporation has entered into operating leases for aircraft, buildings, computer hardware and software licenses and capital leases relating to computer hardware. The obligations on a calendar-year basis, are as follows: Capital Lease 2000 2001 2002 2003 2004 and thereafter Total lease payments Less...

  • Page 25
    ...Issued: 1999 Number Common shares: Balance, beginning of year Initial Public Offering Exercise of options Employee share purchase Conversion of performance shares Cancellation of shares Share issuance costs Tax benefit of issue costs Less: Due from shareholder Balance, end of year Performance shares...

  • Page 26
    ... as the aggregate of 20% times each amount of new equity invested, times the number of days that the new equity was available to the Corporation, divided by the number of days in the year. At the Annual and Special Meeting of the Shareholders held on June 21, 1999, the shareholders approved a six...

  • Page 27
    ... issued and outstanding common shares at any time. Changes in the number of options, with their weighted average exercise prices, are summarized below: 1999 Number of options Stock options outstanding, beginning of year Granted Exercised Cancelled Stock options outstanding, end of year Exercisable...

  • Page 28
    ...year. Employees may offer to sell common shares at any time to the Corporation for 50% of the then current market price. As at December 31, 1998, $209,000 was held in Trust representing employee and employer contributions under the Plan and the Company had an obligation to issue 52,331 common shares...

  • Page 29
    ... the basis of three common shares for each two common shares held. The stock split is subject to shareholders' approval and will be proposed at the Corporation's Annual and Special Meeting on May 4, 2000. WestJet Airlines 27 1999 Annual Report Larry, an Aircraft Mechanic at the Winnipeg airport.

  • Page 30
    ... Manager, Canadian Equities Ontario Teachers' Pension Plan Board Tim Morgan Senior Vice President, Operations WestJet Airlines Ltd. Donald A. MacDonald President Sanjel Corporation Larry Pollock President and Chief Executive Officer Canadian Western Bank and Canadian Western Trust Officers Clive...

  • Page 31
    The Future... The Boeing 737-700: the future of WestJet's fleet.

  • Page 32
    35 McTavish Place N.E., Calgary, Alberta T2E 7J7 Telephone: 403.735.2600 Facsimile: 403.571.5367 Website: www.westjet.com