Westjet 2015 Annual Report Download - page 47

WestJet Annual Report 2015 | 45
well as obtain suitable new sources of financing in the future. Adverse impacts to our future operating performance and cash
flows or adverse changes in the debt and equity markets, including any adverse regulatory or government imposed changes,
would negatively impact our ability to service our existing fixed obligations as well as obtain new sources of financing on
reasonable terms. In turn, this could have adverse effects on our future operations and financial condition and prevent us
from achieving our desired growth strategy.
There are risks associated with our presence in some of our international emerging markets, including political
or economic instability and failure to adequately comply with existing legal requirements.
Emerging markets are countries which have less developed economies that are vulnerable to economic and political problems,
such as significant fluctuations in gross domestic product, interest and currency exchange rates, civil disturbances,
government instability, nationalization and expropriation of private assets and the imposition of taxes or other charges by
governments. The occurrence of any of these events in markets served by us and the resulting instability may adversely affect
our business.
We continue to expand our service to Mexico, Central America and countries in the Caribbean, some of which have less
developed legal systems, financial markets, and business and political environments than Canada and the U.S., and therefore
present greater political, economic and operational risks. We emphasize legal compliance through a code of conduct and have
implemented policies, procedures and ongoing training of employees to ensure compliance with all legal requirements.
However, there can be no assurance that our employees will adhere to our codes of conduct and other policies and as such
we may be subject to sanctions, investigation costs and other potential penalties and costs, which could negatively affect our
business and ability to continue to operate in certain jurisdictions.
Risks relating to the airline industry
Any major safety incident involving our aircraft or similar aircraft of other airlines could materially and
adversely affect our service, reputation and profitability.
A major safety incident involving our aircraft during operations could cause substantial repair or replacement costs to the
damaged aircraft, a disruption in service, significant claims relating to injured guests and other parties and a negative impact
on our reputation for safety, all of which may adversely affect our ability to attract and retain guests. We have an Emergency
Response Plan in the event of an incident occurring.
An air carrier’s liability is limited by applicable conventions, including the Montréal and Warsaw Conventions. Any changes to
these or other conventions or treaties could increase our potential liability to guests.
We carry insurance similar to other scheduled airlines operating in the North American market. While we believe our insurance
is adequate, there can be no assurance that such coverage will fully protect us against all losses that we might sustain, which
could have a material adverse effect on our results of operations. There is no assurance that we will be able to obtain
insurance on the same terms as we have in the past.
There is a possibility that a significant terrorist attack, pandemic or geological event could have a material impact on our
operations, which could also negatively impact the insurance market and our ability to obtain coverage at current terms.