07/28/2015 01:32 EDT | Updated 07/28/2016 05:59 EDT

WestJet Hauls In Record Earnings On Lower Fuel Costs, More Passengers


CALGARY - WestJet reported record earnings Tuesday in its second quarter, propelled by falling fuel costs and a rising number of passengers.

Gregg Saretsky, the CEO of the Calgary-based airline, said he expects the company's discounted rates and updated WestJet Plus fares for its premium economy class to drive similarly strong results in the second half of the year, despite a stumbling Canadian economy.

"We're making a lot of Canadians happy and we're filling up a lot of planes,'' he said in a conference call with analysts and investors.

WestJet earned a second-quarter profit of $61.6 million, up from $51.8 million in the same period last year. Revenue improved to $942.0 million, up from $930.3 million last year.

Earlier this year, WestJet said it would add the Boeing 767 to its fleet of aircraft, with an eye to using the larger passenger jets on some of its longer flights.

The new planes will feature an Economy Plus class, a cheaper alternative to business class that still gives travellers more room and extra amenities, WestJet said.

"We're taking advantage of what we're seeing in corporate Canada with corporate travel policies changing and companies not permitting their flyers on segments under five hours to buy business class fares,'' Saretsky said.

The quarterly results come as WestJet pilots are in the midst of a vote to decide if they'll form the airline's first union. The WestJet Professional Pilots Association is pushing to unionize the company's roughly 1,300 pilots, with voting until Aug. 5.

Saretsky said he doesn't believe the company's relationship with its workforce will change, regardless of what happens.

"We've enjoyed very good labour relations with our employees over 19 years,'' he said. "I don't expect that changes.''

The WestJet Professional Flight Attendants Association also wants to have the airline's approximately 2,700 flight attendants unionized, but they are still working to have a majority of members sign up before a vote can be held.

The company also said Tuesday that it is rolling out a new in-flight entertainment system, offering TV shows, movies and wireless Internet access to passengers who download a company app on their personal smartphones or tablets.

In its quarterly report, capacity was up 7.5 per cent compared with a year ago, while revenue passenger miles were up 5.5 per cent.

Cost per available seat mile for the airline improved to 12.65 cents, down from 13.76 cents a year ago. But revenue per available seat mile slipped to 14.16 cents compared with 15.02 cents in the same quarter last year.

Saretsky also said the company intends to complete its search for a chief financial officer by the end of the next quarter, with interim CFO Candice Li one of the candidates for the position.

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