WestJet's fourth-quarter revenue declined 3.6 percent year
over year to C$959 million as the carrier contended with economic weakness in
the Alberta market.
The hub of Canada's oil industry originates a quarter of
WestJet's capacity, and as it reels from lower fuel prices, WestJet has lowered
its capacity plans for this year, CEO Gregg Saretsky said in the carrier's
fourth-quarter earnings call. This summer, WestJet will cut capacity in Alberta
by 5 percent year over year. That means WestJet now plans to grow systemwide capacity
between 7 percent and 10 percent this year, much of that coming from new
service to Hawaii and London
Gatwick Airport.
WestJet also plans to expand availability of its
premium-economy Plus seating by adding more rows, Saretsky said. Last year, the
carrier ramped up benefits associated with its Plus fare, including covering
up middle seats to add space on Boeing 737 aircraft and adding new food
options.
While WestJet's yield declined 4.2 percent year over year
during the fourth quarter and 1.9 percent for the full-year 2015, yield on the
Plus cabin increased year over year. "It's a value-priced business
product," Saretsky said. "As Canadian companies are looking to save
money, they're looking to take advantage of fares for a business product that
are 50 percent lower than our competitor's business fares."
During the fourth quarter, capacity increased 2.3 percent
year over year and traffic increased 0.6 percent. WestJet's load factor
declined 1.3 percentage points to 78.4 percent.
WestJet reported net earnings of C$63.4 million for the
quarter, down 30 percent year over year. Full-year net earnings rose 16 percent
to C$367.5 million.