Westjet profit soars 19% as jet fuel costs plummet

WestJet Airlines Ltd reported a 19 per cent rise in quarterly profit, helped by lower fuel costs and addition of new routes. Global crude prices have nearly halved from June last year, lowering costs for airlines and logistics and shipping companies, among others.

WestJet's fuel costs fell 21.8 per cent to $214.9-million in the second quarter. Fuel is usually an airline's largest variable cost, accounting for a third or more of operating expenses.

Cost per available seat mile, a measure of how much an airline spends to fly a passenger, fell 8.1 per cent to 12.65 cents. WestJet is trying to attract customers away from Air Canada by adding international routes and boosting capacity while keeping fares low.

WestJet says it is no longer adding a fuel surcharge to ticket prices.

WestJet's revenue per available seat mile (RASM), an indicator of an airline's efficiency calculated by dividing operating income by available seat miles, fell 5.7 per cent, mainly due to lower fares.

The company's net earnings rose to $61.6-million, or 49 cents per share, in the quarter ended June 30 from $51.8-million, or 40 cents per share, a year earlier. Revenue rose 1.3 per cent to $942-million.

Calgary-based WestJet shares closed at $22.67 on the Toronto Stock Exchange on Monday. Up to Monday's close, the stock had fallen 32 per cent this year.