WestJet has signed a definitive purchase agreement with Boeing for up to 20 787-9 Dreamliner aircraft. This agreement includes commitments for 10 Boeing 787-9 aircraft to be delivered between the first quarter of 2019 and December 2021, with options for an additional 10 aircraft to be delivered between 2020 and 2024. The airline also announced it has selected General Electric's GEnx-1B engine for the 787.
"This order represents an exciting new chapter in WestJet's history," said Gregg Saretsky, WestJet President and CEO. "We have carefully executed on our strategic plan, first launching WestJet Encore to connect smaller communities across Canada to our growing network followed by our successful venture into wide-body flying to Hawaii and London Gatwick. Now, with the most sophisticated commercial airliner available, we turn our attention to further growing our international presence and introducing even more travellers to our award-winning guest experience."
"We welcome WestJet to the Dreamliner family and look forward to the new destinations they will serve," said Ray Conner, Vice Chairman of The Boeing Company. "WestJet, for its entire 21-year history, has been a loyal all-Boeing jet customer and we're excited to see them expand their fleet with the 787."
"Our ability to compete globally and deliver our plan comes from the hard work and dedication of our more than 12,000 WestJetters and I am excited for what this news represents for them," continued Gregg Saretsky. "They are truly representative of our Canadian values of warm hospitality and openness and on behalf of them, we now turn our attention to welcoming the Dreamliner to the WestJet family."
As part of this purchase agreement, WestJet is converting 15 firm orders for the Boeing 737 MAX that were to be delivered between 2019 and 2021 to options available between 2022 and 2024.
The company will be launching an ultra-low-cost-carrier shortly as well as expanding its international network. Management have suggested that the 787s could be used on new routes to China, whereas the ULCC carrier will operate with 10 high density 737s.
WestJet has posted first quarter 2017 net earnings of $48.3 million, or $0.41 per diluted share, compared with quarterly net earnings of $87.6 million, or $0.71 per diluted share reported in the first quarter of 2016. Total revenues for the first quarter were $1.114bn – an increase of 8% over the prior-year period. Available seat miles rose 5.5% to 7.699bn, with revenue passenger miles up by 6.8% to 6.393bn. WestJet’s load factor rose by 0.9 percentage points during the reporting period to 83%.
These first quarter 2017 results include a pre-tax non-cash adjustment to its maintenance provision of $18.5 million and irregular operations related costs of $7.0 million due to severe winter weather experienced in the quarter. Based on the trailing twelve months, the airline achieved a return on invested capital of 10.0 per cent, compared with the 11.3 per cent reported in the previous quarter.
"We are pleased to report strong topline revenue growth and our first positive unit revenue (RASM) performance in eight quarters. We are seeing good results from Plus, our premium economy product, growth in our WestJet Rewards program and penetration into the business traveller segment all of which gives us confidence that RASM will continue to improve for the remainder of the year," said WestJet President and CEO Gregg Saretsky.
On May 1, 2017, WestJet's Board of Directors declared a cash dividend of $0.14 per common voting share and variable voting share for the second quarter of 2017, to be paid on June 30, 2017.