WestJet talks Q3 results, Dreamliners and more

While WestJet’s third-quarter results marked a return to profitability, the airline is looking ahead to continue improving its results through a variety of methods.

In an interview with PAX this week, WestJet’s VP of marketing communications Richard Bartrem discussed the latest financial results and where the airline is heading in 2019 and beyond.

While WestJet’s total revenue for the quarter was $1.26 billion – up from $1.21 billion reported this time last year – total earnings for the quarter were $45.9 million, compared to earnings of $135.9 million reported in the third quarter of 2017. However, the latest results marked a return to profitability following a $20.8 million loss in the second quarter, WestJet’s first money-losing quarter in 13 years.

READ MORE: WestJet's newest international Dreamliner flights will connect Calgary and Europe

“We’ve gone from losing money in the second quarter – the first time in 13 years - and then to bring it back to profitability this quarter,” Bartrem said. “It’s not a one and done – we have a lot more work to do and we’re working on a great number of those initiatives to continue that profitability streak.”

Fuel prices

Of the factors affecting profitability this quarter, Bartrem said that the increasing cost of fuel had the biggest impact.

Climbing from 62 cents in 2017 to 85 cents per litre this year, fuel prices jumped more than 37 per cent year-over-year, a factor which Bartrem said affected all carriers equally.

To offset the cost, he said WestJet has begun a new initiative to reduce aircraft weight, taking all aspects of the carrier’s planes into account.

“We took an aircraft which had just come off a flight, towed it into the hangar and then took everything off of it that wasn’t bolted down and weighed it,” he said. “We wanted to understand everything that needed to be on that plane and what can be changed. We also looked at the amount of liquid on-board and this also includes the weight of paper used in our in-flight magazine – can we use a different weight of paper?”

ULCC competition

The current influx of ultra-low cost carriers (ULCCs) in Canada is an increasing challenge for WestJet, Bartrem said, adding that “while ULCCs are certainly a factor in our results, it’s one of the reasons we launched Swoop.

“We recognized that there are consumers who want a bare-bones offering, but we’ve also launched fares that would be available on the mainline WestJet where Swoop doesn’t exist.”

Looking ahead

With WestJet’s 10 new Dreamliners coming online over the next few years, Bartrem said that the airline is looking ahead to its establishment as a full-fledged global carrier, adding new routes and destinations to its network.

In addition, the carrier is also growing its business travel product with the launch of a reconfigured Premium cabin this week, taking the former Plus product to a new level.

“We’re reconfiguring the entire 737 fleet; the first one arrived in Calgary last week and went into service yesterday. It’s a two-by-two configuration and will be sold as a separate cabin with a divider, so that those consumers who are looking for something a little elevated will have that available.”

“We recognize that there’s still a lot of work to be done, but what we’re building out is an airline in transition,” he said. “For 20 years, we’ve viewed ourselves as a discount carrier but now we’ve moved to be a full-service global carrier.”