Westjet 2002 Annual Report Download - page 22

Download and view the complete annual report

Please find page 22 of the 2002 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.

Page out of 60

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60

tinue to welcome more guests onboard
our aircraft. Despite this fierce compet-
itive environment and the additional
shares issued in March, our diluted earn-
ings per share increased 32.7% from 52
cents in 2001 to 69 cents in 2002. We
grew our pre-tax earnings margin from
12.1% of revenues, or $57.8 million,
in 2001 to 12.2% of revenues, or $82.8
million, in 2002.
The weakest times of the year for
travel in the airline industry are late
autumn and winter – our fourth and
first quarters – with the exception of the
December holiday season. WestJet
22 2002 WestJet Annual Report
were utilized in 2002, and will accom-
modate the forecasted 676 full-time-
equivalent employees (FTEs) who will
be added to our team in 2003.
During 2002, over 49,000 people
applied for jobs at WestJet. Our People
Department checked references on
10,000, and interviewed 5,000 potential
WestJetters. As a result, we added 814
great new people to the WestJet team
in 2002 for a total at year end of 3,120
talented individuals, or 2,710 FTEs.
Financing activity during 2002 was
highlighted with a successful $82.5 mil-
lion bought deal common share issue
in March, while our shareholders
approved a three-for-two share split at
our Annual and Special Meeting in
April. As well, we completed our largest
financing agreement ever with the
United States government’s Export-
Import (Ex-Im) Bank relating to its
commitment for loan guarantees for the
purchase of 30 Boeing 737-700 aircraft.
In October 2002, we converted half of
this preliminary commitment into a US
$477.8 million final commitment to
purchase 15 of the 30 aircraft.
RESULTS OF OPERATIONS
In 2002, WestJet added a net of eight
aircraft to our fleet and increased
Available Seat Mile (ASM) capacity by
over 55%. This increased capacity was
deployed right across the country into
both mature and new markets. Our net
earnings increased 41.1% from $36.7
million in 2001 to $51.8 million in
2002. We achieved this despite higher
fuel costs, the federal government’s
imposition of a destimulative $24 flat-
fee security tax, significantly higher
insurance premiums, and an uncertain
economy.
Our continued growth and the supe-
rior value of our product has created
deep discount pricing for Canadian
travellers as our main competitor tries to
protect its market share while we con-
Dollars & Sense
“We focus on a proactive approach to workplace safety,” says Trevor Shaw,
Advisor, Occupational Health and Safety.
Wendy Hladun, Victoria CSA, enjoys
life on WestJet’s island in the Pacific.
Return on Average Capital Employed
(Percent)
0
5
10
15
20
25
30
35
21.8
31.2 29.9
23.7
20.0
1998 1999 2000 2001 2002
Return on Average Shareholders’ Equity
(Percent)
0
5
10
15
20
25
14.5
22.0 22.0
18.2 17.9
1998 1999 2000 2001 2002