Westjet 2001 Annual Report Download - page 21

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19
The profit share system is a variable cost that
automatically reduces and self adjusts in
negative times to avoid cost-cutting
measures such as wage reductions and
layoffs. Conversely, in good years, as was
2000 with its 19.9% margin, profit share will
generously reward employees. An average
WestJetter received approximately 37% of
their base pay as profit share for 2000, and in
the face of the uncertainty and turmoil in the
industry, WestJetters were pleased to receive
about 20% of base pay in profit share for
2001. The corporation saw a 5.6 percentage
point decline in its margin, but only a 3.7
percentage point decline in earnings from
operations because of the profit share
formula.
Our earnings before interest, income taxes,
depreciation and aircraft rents (EBITDAR)
were $113.0 million in 2001 or 23.6% of
revenues. This was a 40.5% increase over
2000’s $80.4 million or 24.2% of revenues.
The impact of increased amortization of our
fleet of 737-200 aircraft, as well as the lease
costs relating to the four new 737-700
aircraft, resulted in the larger relative decline
in earnings before interest and income taxes
(EBIT). This measure had a 13.8% increase
from $55.6 million in 2000, and 16.7% of
revenues to $63.3 million and 13.3% of
revenues in 2001.
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
1996 1997 1998 1999 2000 2001
2.3%
15.1%
13.2%
16.8% 16.7% 16.7%
RETURN ON EQUITY
Net Earnings/Shareholders’ Equity at Year End
...WestJetters were pleased to receive about 20% of base pay
in profit share for 2001.
AVERAGE STAGE LENGTH
(Miles)
0
50
100
150
200
250
300
350
400
450
500
1996 1997 1998 1999 2000 2001
364 349
378 383
419
458
MANAGEMENT’S DISCUSSION AND ANALYSIS
Sault Ste. Marie again diversified WestJet's Ontario service.
WestJet first flew to "The Soo" on December 18, 2001, providing the
catchement area of 125,000 people with a new travel alternative.
Sault Ste. Marie means "The Rapids of Saint Mary" - maybe the
people who named it in 1669 knew WestJet's "rapid" Boeing 737 jets
would one day fly there!
New Destination
YAM - Sault Ste. Marie, Ontario