Westjet 2014 Annual Report Download - page 16

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WestJet Annual Report 2014│14
Inflight
Inflight expense is comprised mainly of salaries and benefits, travel costs and training for our flight attendants. For the year
ended December 31, 2014 inflight expense was $171.7 million, a $5.2 million or a 2.9 per cent decrease from $176.9 million in
2013. Our inflight cost per ASM was 0.67 cents in 2014, representing a decrease of 9.5 per cent from 0.74 cents in the prior
year. These decreases are primarily attributable to operating at a ratio of one flight attendant for every 50 seats onboard an
aircraft on a full year basis. We worked in cooperation with our flight attendants to implement this change on October 1,
2013, and this has resulted in cost savings through a reduction in overall salaries and benefits and other travel costs when
compared to the prior year.
Maintenance
Maintenance expense is comprised of technical maintenance which represents costs incurred for maintenance on our aircraft
fleet, and a maintenance provision which represents our estimate of future obligations to meet the lease return conditions
specified in our lease agreements.
Expense (thousands) CASM (cents)
2014
2013
Change
2014
2013
Change
Technical maintenance 155,252 137,114 13.2% 0.61 0.58 5.2%
Maintenance provision
38,433
32,083
19.8%
0.15
0.13
15.4%
Total maintenance
193,685
169,197
14.5%
0.76
0.71
7.0%
Maintenance expense for the year ended December 31, 2014, was $193.7 million, which represents a $24.5 million or 14.5 per
cent increase from $169.2 million in 2013. Our maintenance cost per ASM was 0.76 cents in 2014, representing an increase of
7.0 per cent from 0.71 cents in the prior year.
Technical maintenance expense for the year ended December 31, 2014, was $155.3 million, which represents a $18.1 million
or 13.2 per cent increase from $137.1 million in 2013. Our technical maintenance cost per ASM was 0.61 cents in 2014,
representing an increase of 5.2 per cent from 0.58 cents in the prior year. These year-over-year increases were mainly
attributable to an increase in the number of maintenance events. As our fleet continues to grow and mature, we perform
more maintenance on our aircraft.
Maintenance provision expense for the year ended December 31, 2014, was $38.4 million, which represents a $6.4 million or
19.8 per cent increase from $32.1 million in 2013. Our maintenance provision cost per ASM was 0.15 cents in 2014,
representing an increase of 15.4 per cent from 0.13 cents in the prior year. The year-over-year increases in our maintenance
provision for leased aircraft was mainly driven by changes to the projected timing and scope of maintenance activities for
certain leased engines primarily driven by the extension of twelve aircraft leases, a lower discount rate experienced during
2014 as compared to 2013, and, as the majority of our maintenance provision is denominated in US dollars, an unfavorable
year-over-year foreign exchange impact. These increases are partially offset by a recovery for $3.9 million in maintenance
reserves paid to aircraft lessors, which were previously deemed unrecoverable, but are now considered recoverable due to the
extension of four of the aircraft lease extensions. Our provision is calculated based on the best information available to us and
includes estimates on the cost and timing of future maintenance activities on leased aircraft, as well as discount rates.