Westjet 2008 Annual Report Download - page 20

president’s message
to shareholders
With the dust settled on a turbulent 2008, looking back on what
we accomplished gives me both optimism and enthusiasm for
what the future has in store. Despite challenging oil prices,
economic uncertainty and a global credit crisis, we stayed
committed to our strategic plan, which included providing our
excellent guest experience, remaining focused on our people
and ensuring that we remained fi nancially strong. If 2008
was a test, we passed with fl ying colours and proved that our
business model really works.
There were a number of challenges that defi ned 2008 for all
industries. In the fi rst half of the year, runaway oil prices, which
reached $145 a barrel in July, impacted all businesses that are
dependent on the black gold. In the second half of the year,
credit markets crashed, which led to bankruptcies and bailouts
for a number of industries. Individuals fared no better, as credit
card debt and over-leveraged mortgages destroyed confi dence
and set the world into a recession. Businesses were forced into
a new economic reality where lending was tight and consumers
became very discriminating in their spending. In the midst of
such turbulence, WestJet truly prevailed thanks to our low-cost
operating model, substantial cash balance, trusted brand name
and team of WestJetters who were committed to delivering
value and a great guest experience.
With revenues of $2.5 billion, net earnings of $178.1 million and
one of the best pre-tax margins among our North American
peers, we managed our way to our second-most profi table
year ever – substantiating our position as a leader in the airline
industry. We continued implementing our tried and trusted
business model of keeping controllable costs down and taking
care of our people who, in turn, take care of our guests. This
simple strategy is how we keep producing results that we can
be proud of.
Through our share purchase plan, our profi t sharing program
and, most importantly, the family environment we have created,
our success as an airline is tied to the individual success of
every WestJetter. Our philosophy around empowerment and
accountability translates into a work atmosphere where our
people continuously go above and beyond, and guests feel
welcomed and appreciated. The skills and heart that each and
every WestJetter brings to their job – regardless of the role –
creates the personality and humanity of our airline. They are
the reason I love this airline and why millions of guests choose
to fl y with us.
With our continued track record of success, even in the most
challenging economic conditions, we feel comfortable with our
long-term road map, our ability to deliver fi nancial success
and to keep reaching for our vision for 2016 – to be one of the
fi ve most successful airlines in the world by providing our
guests with a friendly and caring experience that will change
air travel forever.
While 2008 was a great success, despite a somewhat turbulent
fl ight path, we are looking forward to what is in store for 2009.
Although the shaken economy leads us to believe that the
coming year will be no less turbulent, it will still be an exciting
time for our airline and a year for investing in our future. I truly
believe that companies that invest wisely, even in tough times,
will lead the way when the good times return.
In store for 2009
In 2009, we believe we will increase our market share by
focusing on adding new destinations and non-stop routes
to enhance our current network. In fact, we had a quick
takeoff to the year, announcing the beginning of service to
four new destinations: Sydney, Nova Scotia; Yellowknife,
Northwest Territories; and San Francisco and San Diego,
California. I believe that these new Canadian and U.S.
destinations move us closer to our goals of having 40 to
50 per cent of the domestic market share and approximately
20 per cent of the transborder and Caribbean/Mexico market
share by 2013.
To meet the needs of our expanding network, we have nine
aircraft scheduled for delivery throughout the year, the fi rst
of which arrived in February and brought our fl eet to 77. We
anticipate ending the year with 85 aircraft and a fi ve per cent
year-over- year increase in capacity. This will play an important
role in achieving our market share goals, while contributing to
the capacity requirements necessary for our 2009 objectives,
which include code-sharing and expanding WestJet Vacations.
Much of 2009 will be about developing our capabilities to partner
with other airlines. We are investing in technology and resources
to have code-sharing in place with Southwest Airlines in late
2009 and Air France and KLM by early 2010. Code-sharing with
Southwest will give us better access to the transborder market,
valued at over $5 billion, while both arrangements will increase
the network fl ow we have coming into Canada, potentially by
hundreds of thousands of guests.
Details for our new rewards and credit card programs are still
in the works. Our goal is to create a rewards program that is
lucrative for fl yers, easy to use and benefi cial for both frequent
fl yers and those guests who are new to WestJet.
WestJet Vacations represents a great opportunity for our future
growth and our ability to offer a more diversifi ed product for our
16 WestJet 2008 Annual Report