Westjet 2014 Annual Report Download - page 4

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WestJet Annual Report 2014 │ 2
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President’s message to shareholders
I have been incredibly privileged to be a WestJetter since 2009. In that time, I have seen our airline successfully grow and
evolve to meet the challenges of a competitive and dynamic marketplace. The thing that hasn’t changed over the years is our
focus on keeping our costs low and WestJetters’ commitment to providing guests with our remarkable brand of friendly, caring
service. The positivity and passion for this company that our more than 10,000 WestJetters exhibit every day is the foundation
of our success and is at the core of who we are.
2014 was about executing on our strategies, and that is the theme of this report. Throughout the year, we continued to
execute on long-term revenue enhancing and cost reduction strategies, and implemented several new initiatives that will
support our continued profitable growth and strengthen our proven and tested business model.
We had another great year in 2014, and our record financial and operational results are evidence of the success we are seeing
from our business strategies. 2014 marked our 10th consecutive year of profitability and the 18th time we have reported an
annual profit in our 19 years of reporting. We achieved record adjusted net earnings of $317.2 million or $2.46 per fully
diluted share in 2014, up 18 per cent and 21 per cent year-over-year, respectively. The fourth quarter of 2014 also
represented our 39th consecutive profitable quarter and the 10th consecutive quarter in which we exceeded our return on
invested capital target of 12 per cent by achieving 14.3 per cent. Operationally, we put significant focus on improving our on-
time performance in 2014 and achieved our best on-time performance rate in seven years. 78.9 per cent of our flights arrived
within 14 minutes of our published timetable, up 5.0 percentage points year-over-year.
At the beginning of 2013, we set a goal for ourselves of reducing our annual costs by $100 million by the end of 2015. I am
very proud to say that by the end of 2014 we exceeded that goal, realizing approximately $125 million of savings, one full
year ahead of our initial target. Our low-cost culture is a core part of who we are, and we will continue to identify and
implement efficiencies that will drive cost savings across our business in 2015 and beyond.
We implemented several initiatives in 2014 to improve our airline’s value proposition to our growing number of business
travelers. These initiatives included increasing schedule utility and expanding connectivity as we optimized our network and
schedule using the two types of aircraft in our fleet; the continued evolution of our Plus product, which offers more comfort,
convenience and flexibility for value-oriented business travelers, and the introduction of new Gold, Silver and Teal levels to our
Rewards program, offering further convenience and flexibility and accelerated reward dollar earning opportunities.
Over the course of 2014, we continued to grow and strengthen our network which now serves more than 90 destinations in
North America, Central America, the Caribbean and Europe. Combined with our airline partners, our virtual network provides
our guests access to over 150 destinations via WestJet. During 2014, we grew the total number of airline partnerships to 46
through new interline relationships and new code-share agreements with Qantas Airways and China Airlines.
In 2014 we launched our most successful new destination ever with service to Dublin, Ireland, which proved extremely
popular on both sides of the Atlantic! Building on that success and the operational experience we gained in European markets,
in October 2014 we announced that we would begin service between Halifax, Nova Scotia and Glasgow, United Kingdom in
May 2015 and that we would resume our seasonal service to Dublin six weeks earlier. We are very excited to continue
bringing WestJet’s friendly caring service to European destinations in 2015.
We continued to expand our fleet in 2014 with the addition of seven new 737NG-800s and seven new Bombardier Q400s.
Supported by this fleet expansion, we flew a record 19.7 million guests in 2014, an increase of 6.3 per cent from 2013, or 1.2
million additional guests. At the same time, as part of our strategy to optimize and modernize our fleet mix, we disposed of
five of our oldest Boeing 737NG-700 aircraft, and expect to dispose of five more in the first half of 2015.
In July 2014, we announced our intention to begin flying our own wide-body aircraft for the first time. We selected four
Boeing 767-300ERW aircraft for that role and will deploy them on routes between Alberta and Hawaii in late 2015. Beginning
in the spring of 2016, we will look to use these aircraft to expand our network into additional overseas markets.
WestJet Encore, which celebrated its first birthday in June 2014, continued to bring our remarkable brand of service to new
communities, feed our existing network, and increase our overall schedule efficiency as it moved forward with its successful
expansion across Canada in 2014. WestJet Encore saw its first service to central and eastern Canada in 2014, and with the
announcement of destinations in New Brunswick, Nova Scotia and Newfoundland beginning in 2015, WestJet Encore now