Westjet 2000 Annual Report Download - page 21

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Please find page 21 of the 2000 Westjet annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

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23 + 4
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12 + 35 + 9
7 + 36 + 25
3+36+43
737-200 Series
NG Firm
New Generation Firm
NG OPTIONS
New Generation Options
Our financing activity in 2000 reflected our business philosophy of maintaining a flexible
and strong balance sheet while growing our fleet. We retired and sold one of our original
three aircraft early in the year, purchased six aircraft outright and added a seventh to the
fleet via operating lease. WestJet also completed a sale and capital leaseback transaction
for $10.0 million in the fourth quarter. WestJet has been very profitable, virtually since day
one, and long ago used its pre-startup loss carry forwards for income tax purposes. There
is a distinct tax advantage to owning rather than leasing aircraft and we purposely set out
to use that advantage and our cash to acquire the majority of our aircraft during the year.
WestJet is nearing completion of its $23.0 million hangar facility in Calgary and during
2000, moved into the new call centre and administrative headquarters building, which was
secured on a ten-year lease. As at December 31, 2000 capital outlay on the hangar and its
simulator bay amounted to $20.0 million and $10.3 million had been drawn on our $12.0
million mortgage facility.
The airline spent $9.6 million on its two simulators in 2000, about half of the total
commitment, and drew $8.8 million of $16.1 million in available term debt financing for
the 737-700 trainer. With cash, WestJet paid deposits and pre-delivery payments required
under the new aircraft leases and purchase contracts amounting to $18.4 million and also
acquired a total of $20.5 million in various spare engines and parts, leasehold
improvements, computer technology and sundry equipment.
Outlook
All WestJetters are excited about our new facilities and look forward to the arrival of our
new generation Boeing 737-700 aircraft. These planes fly faster, farther and quieter than
our existing airplanes and will provide us with improved utilization, fuel efficiencies, and
lower maintenance costs. We are confident of the improved economics they will provide,
notwithstanding their higher ownership cost. We have a strong balance sheet and a low
cost structure, which can well withstand any potential recessions and competitive
pressures in our industry and we feel very confident that we will be able to take full
advantage of this enviable position in the years to come. WestJet has been through
regional recessions, fare wars and vigorous competition for five years, all of which have
strengthened our culture and the determination of our people as our company further
expands its horizons.
Fleet Plan
36 + 58
Erin is a part of our
Moncton airport team.