Westjet 2005 Annual Report Download - page 29

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2005 WESTJET ANNUAL REPORT
27
During the year, we bought two of our previously leased
737-200 aircraft. To diminish our exposure to future lease
payments and lease return conditions, we purchased these
aircraft to create certainty around these lease obligations.
Our remaining three leased 737-200 aircraft will be dealt
with in the same manner in early 2006 and we plan to sell
them early in the year. These five 200-series aircraft have
been taken out of revenue service effective January 8, 2006.
Interest Expense
Our interest expense increased by 25.8% in 2005 to
$55.5 million for the year, which represents 0.52 cents on
a per-ASM basis compared to 0.49 cents per ASM in 2004.
This increase is primarily due to the additional $256.4
million in debt that we incurred in 2005 to support the
acquisition of seven new Next-Generation aircraft in the
year. All long-term debt related to the financing of our
Next-Generation aircraft, which accounts for 97% of our
total long-term debt, is financed on a fixed-rate basis in
Canadian dollars at an average rate of 5.39%. The
fixed-rate nature of our financing eliminates the risk of
interest-rate fluctuations over the life of the debt.
Customer Service
The focus of our customer service is on the overall
experience of our guests. Our goal is to find ways to create
pleasant, hassle-free experiences from the first encounter
on the phones or online, to the time guests deplane at
their final destination. Our CASM relating to customer
service remained flat year over year at 0.26 cents. With
expansion into transborder and international charter
destinations during the year that come with higher costs,
we are proud that our costs in this area remained
contained while we continued to offer a high level of
customer service. In 2005, we were once again honoured
to be acknowledged for having the most admired corporate
culture in Canada by Canadian Business magazine and
Waterstone Human Capital Ltd.
Linda Gagnon
Executive Administrative Assistant
Our goal is to find ways to create pleasant,
hassle-free experiences from the first
encounter on the phones or online, to the
time guests deplane at their final destination.