WestJet profit falls 38% as Alberta slowdown continues
Earnings of $87.6 million still better than many analysts had expected for Calgary-based airline
Canada's second-largest airline saw a sharp drop in its second-quarter profit, but still managed a better performance than analysts who cover the company were expecting.
Calgary-based WestJet Airlines Ltd. said Tuesday it earned $87.6 million, or $0.71 per share last quarter. That's a 38 per cent decline from the same period a year earlier, when the company earned $140.7 million, or $1.09 per share.
Analysts had expected profit to come in at around 65 cents per share.
The company managed to steer through the turbulence underway in its biggest market — Alberta — by shifting its focus eastward to markets such as Toronto, where it hasn't historically been as prevalent.
WestJet suspended nearly a dozen daily flights in January from Alberta's airports after airlines operating in the oil-rich province started recording a significant decline in passenger traffic.
"Although we continue to feel the impact of economic weakness in Alberta, the fundamentals of our business remain strong," CEO Gregg Saretsky said. "We are seeing positive trends as a result of adjustments we have made to our schedules and the strategic initiatives we are undertaking."
On a call to discuss the results with investors, Saretsky said the airline will be announcing a new charter service shortly, while the airline is also only days away from launching its direct flights to London, England.
The airline's load factor — a closely watched metric that tries to measure how full the planes are of paying passengers — ticked up half a percentage point to 82.1 per cent.
The airline flew 5,325,106 travellers during the quarter, an eight-per-cent increase from 4,914,579 flown during the same period a year ago.
Sexual assault accusation looms
At the company's annual meeting, Emma Pullman of consumer watchdog SumOfUs delivered an online petition calling for Saretsky to step down because of his handling of accusations of sexual assault within the company.
The petition comes weeks after a former flight attendant filed two lawsuits against the airline — one alleging the company failed to provide a harassment-free workplace for its female employees, the other accusing it of not taking proper action after she reported being sexually assaulted by a pilot.
WestJet has rejected the allegations, saying it encourages staff to report inappropriate behaviour in confidence and it would not put its reputation at stake by inadequately dealing with complaints. The allegations haven't been tested in court.
The company has enlisted audit firm EY to look into its practices around the issue and Saretsky said the recommendations of the report will be made public when it's complete.
With files from The Canadian Press