Westjet 2010 Annual Report Download - page 12

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10 WestJet 2010 Annual Report
OVERVIEW
Although economic uncertainty persisted throughout 2010,
demand for air travel improved, which is reflected in our strong
financial results for the year. The increase in demand resulted
in improved yields year-over-year, particularly throughout
the second half of 2010. Our 2010 earnings before tax (EBT)
margin of 7.5 per cent was once again one of the best in the North
American airline industry. In 2010 we began to capitalize on new
reservations systems for both WestJet and WestJet Vacations,
which were implemented in the prior year. In the first quarter
of 2010, we launched our WestJet Frequent Guest and WestJet
Credit Card programs, which reward our guests and make our
airline even more attractive for frequent travellers. We continued
to increase our self-service capabilities to enhance our guest
experience, while improving efficiencies at our airports. In 2010
we launched four additional interline agreements, including our
first with a U.S. carrier, American Airlines. We were also able to
further develop one of these interline agreements into our first
code-share arrangement with Cathay Pacific Airlines. In February
2011, we announced our second interline agreement with a U.S.
carrier, Delta Airlines. We will continue to develop our partnership
strategy to enable us to meet our objective of becoming one of
the five most successful airlines in the world by 2016. The fourth
quarter of 2010 marks our 23rd consecutive quarter of profitability.
2010 highlights
• Recognized total revenues of $2.6 billion, an increase of 14.4
per cent from 2009.
•
Recorded RASM of 13.36 cents, up 3.0 per cent from 12.97 cents
in 2009.
• Increased capacity by 11.1 per cent and increased RPMs,
a measure of guest traffic, by 12.9 per cent, compared to
the prior year.
•
Realized CASM of 12.09 cents, up 2.7 per cent from 11.77 cents
in 2009.
• Realized CASM, excluding fuel and employee profit share,
of 8.52 cents for 2010, up 0.8 per cent over 2009.
• Recorded an operating margin of 9.5 per cent, up from
9.2 per cent in 2009.
• Recorded an EBT margin of 7.5 per cent in 2010, an increase
of 1.5 points over the 2009 EBT margin of 6.0 per cent.
•
Realized net earnings of $136.7 million, an increase of
39.3 per cent from 2009.
•
Excluding special items, realized net earnings of $142.8 million,
an increase of 53.3 per cent from net earnings, excluding
special items, in 2009 of $93.1 million.
•
Reported diluted earnings per share of $0.94 for 2010,
an increase of 27.0 per cent from $0.74 in 2009.
• Excluding special items, realized diluted earnings per share
of $0.98, an increase of 38.0 per cent from $0.71 in 2009.
• Generated cash flow from operations of $443.3 million,
an increase from $318.7 million in 2009.
• Realized a trailing 12-month return on invested capital
(ROIC) of 9.2 per cent, an increase from 7.8 per cent as at
December 31, 2009.
•
Declared our first-ever quarterly dividend of $0.05 per common
voting share and variable voting share, paid on January 21, 2011,
to shareholders of record on December 15, 2010.
• Filed a notice with the TSX to make a normal course issuer
bid (NCIB) to purchase up to 7.3 million outstanding shares
on the open market and, in the fourth quarter of 2010,
repurchased 2.3 million shares for total consideration of
$31.4 million.
Our culture and people continued to shine in 2010. In February
2010, we were inducted into Canada’s Most Admired Corporate
Culture Hall of Fame by Waterstone Human Capital. We are also
proud to have been the highest ranked airline based on brand equity
in an August 2010 syndicated study conducted by Harris/Decima.
The other airlines measured in the study were Air Canada,
American Airlines, British Airways, Porter Airlines, Southwest
Airlines, United Airlines and Virgin Atlantic. In addition to being
the highest ranked airline, we also rated in the top three per cent