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WESTJET ANNUAL REPORT 2004
58
Notes to Consolidated Financial Statements
WESTJET AIRLINES LTD.
9. Commitments and contingencies (continued):
(c) Contingencies:
A Fresh as Amended Statement of Claim was filed by Air Canada and ZIP Air Inc. in the Ontario Superior Court on
December 23, 2004 against the Corporation, two officers, two employees, two former officers and one former
employee (the “Defendants”). The principal allegations are that the Defendants unlawfully obtained confidential
flight load and load factor information from Air Canada’s employee travel website and, as a result, the Plaintiffs
have suffered damages and the Defendants have benefited from having access to the alleged confidential information.
The Plaintiffs are seeking damages, aggregating $220 million, but the Plaintiffs have provided no details or evidence
to substantiate their damages claim.
A Statement of Claim was also filed by Jetsgo Corporation in the Ontario Superior Court on October 15, 2004 against
the Corporation, an officer, and a former officer (the “defendants”). The principal allegations are that the defendants
conspired together to unlawfully obtain Jetsgo’s proprietary information and to use this proprietary information to
harm Jetsgo and benefit WestJet. The Plaintiff is seeking damages, in an amount to be determined plus $50 million,
but the Plaintiff has provided no details or evidence to substantiate its claim.
Based on the results to date of (i) an internal investigation, (ii) advice from independent industry experts, and (iii)
cross-examinations of witnesses in the Air Canada proceedings, management believes the amounts claimed are
substantially without merit. The amount of loss, if any, to the Corporation as a result of these two claims cannot be
reasonably estimated. The defense and investigation of these claims are continuing.
The Corporation is party to other legal proceedings and claims that arise during the ordinary course of business. It
is the opinion of management that the ultimate outcome of these matters will not have a material effect upon the
Corporation’s financial position, results of operations or cash flows.
10. Financial instruments and risk management:
(a) Fuel risk management:
The Corporation periodically utilizes short-term and long-term financial and physical derivative instruments to mitigate
its exposure to fluctuations in jet fuel prices. At December 31, 2004 none of these arrangements were in effect.
(b) Foreign currency exchange risk:
The Corporation is exposed to foreign currency fluctuations as certain ongoing expenses are referenced to US dollar
denominated prices. The Corporation periodically uses financial instruments, including foreign exchange forward contracts
and options, to manage its exposure. At December 31, 2004 none of these arrangements were in effect.
Included in cash and cash equivalents at December 31, 2004 is US $28,440,000 (2003 – US $29,942,000).
Years ended December 31, 2004 and 2003
(Tabular Amounts are Stated in Thousands of Dollars, Except Per Share Data)