Lower fuel prices, additional passengers and more efficient planes caused profits to skyrocket at air carrier WestJet (TSX:WJA) in the fourth quarter.
The Calgary-based discount airline reported record fourth-quarter profits of $26.7 million, up from a year-ago profit of $1 million.
For the full year, net earnings also hit a record at $114.7 million, up from $24 million the previous year. Annual revenues jumped to $1.56 billion from $1.2 billion for 2005.
"To say that I'm pleased, very pleased by these results, would be a serious understate- ment," said WestJet CEO Clive Beddoe in a conference call with analysts.
"To have grown our airline by 23 per cent in the fourth quarter on a year-over-year basis while improving yield and load factor is an exceptional achievement."
The Calgary company said it earned 21 cents a share for the three months ended Dec. 31, compared with earnings of one cent a share for the same 2005 period.
Fourth-quarter revenue rose 25.3 per cent to $459.6 million from $366.8 million as the airline added more planes to its fleet and flew additional passengers.
"We recorded record profit for all four quarters in 2006," said Sean Durfy, WestJet's president.
"Our annual net earnings of $114 million is the best earnings results in our history and we generated what is currently the top operating margin in the North American airline industry."
"We generated an operating margin of 11.2 per cent and that's before taxes and profit share. We had 12 consecutive months of increased capacity and profitability," he said.
WestJet also realized a reduction in maintenance costs with the arrival of its new fuel-efficient Boeing 737 jets.
Fuel prices were up 17 per cent overall during the year, but softened in the fourth quarter. A one-cent drop in the price of jet fuel saves WestJet $7.2 million on an annual basis.
Another bright spot for WestJet was the strength of non-flying revenue, including that from sales of food and beverages, headsets, service fees and pay-per-view movies, which grew to almost $75 million in 2006.
