Westjet 2009 Annual Report Download - page 57

WestJet 2009 Annual Report 27
operations, imposing additional requirements on operations, or
reducing the demand for air travel.
Laws relating to data collection on guests and employees for
security purposes and counterbalancing privacy legislation
have increased costs of operations. Any material changes that
add additional requirements to collecting, processing and fi ling
data with, or otherwise reporting data to, government agencies
may materially impact our business as to time and costs and,
therefore, our operating results.
The increase in security measures and clearance times required
for guest travel, as we experienced in 2009, could have a material
adverse effect on guest demand and the number of guests we
carry. A reduction in guest numbers could have a negative impact
on our revenues and results of operations.
We are dependent on single aircraft and engine suppliers.
Any interruption in the provision of goods and services from
these suppliers, or other signifi cant third party suppliers,
as well as mechanical or regulatory issues associated with
their equipment could have a material adverse effect on our
business, operating results and fi nancial condition.
We secure goods and services from a number of third party
suppliers. Any signifi cant interruption in the provision of goods
and services from such suppliers, some of which would be
beyond our control, could have a material adverse effect on our
business, operating results and fi nancial condition.
We are dependent on Boeing as our sole supplier for aircraft and
many of our aircraft parts. If we were unable to acquire additional
aircraft from Boeing, or Boeing were unable or unwilling to
provide adequate support for its products, our operations would
be materially adversely affected. If Boeing was unable to adhere
to its contractual obligations in meeting scheduled delivery dates
for our owned and leased aircraft, we would be required to fi nd
another supplier for aircraft to fulfi ll our growth plans. Acquiring
aircraft from another supplier would require signifi cant transition
costs, and, additionally, aircraft may not be available at similar
prices or received during the same scheduled delivery dates,
which could adversely affect our business, operating results and
fi nancial condition. In addition, we would be materially adversely
affected in the event of a mechanical or regulatory issue
associated with the Boeing Next-Generation 737 aircraft type,
systems. On October 17, 2009, we implemented a new reservation
system that is hosted by Sabre. Because Sabre hosts the
reservation system on our behalf, we will be dependent on Sabre
for processing information critical to our business. In conjunction
with the migration to our new system, a new revenue accounting
system was also implemented during 2009. Additionally, we
implemented a new reservation system on September 13, 2009,
Softvoyage, for our WestJet Vacations business. The revenue
accounting and Softvoyage systems are also hosted solutions.
As such, we are reliant on third party performance for timely and
effective completion of many of our technology initiatives.
Integration of complex systems and technology presents
significant challenges in terms of costs, human resources
and development of effective internal controls. In the ordinary
course of business, our systems will require modifi cations and
refi nements to address our growth and business requirements.
We could be adversely affected if we are unable to modify our
systems as necessary.
As a company that processes, transmits and stores credit card
data, we are subject to compliance with certain requirements
established by credit card companies. Non-compliance with
these requirements, whether through system breaches or
limitations, may result in substantial fi nes and/or temporary or
permanent exclusion from one or more credit card acceptance
programs. The inability to process one or more credit card brands
could have a material impact on our guest bookings, revenue
and profi tability.
Government intervention, regulations, rulings or decisions
rendered that impose additional requirements and
restrictions on operations could increase operating costs or
disrupt our operations.
The airline industry is subject to extensive laws relating to,
among other things, airline safety and security, provision of
services, competition, environment and labour concerns.
Government entities such as Transport Canada, the Competition
Bureau, the Canadian Transportation Agency, and other domestic
or foreign government entities may implement new laws or
regulatory schemes, or render decisions, rulings or changes in
policy that could have a material adverse effect on the airline
industry in general by signifi cantly increasing the cost of airline