CANADIAN PRESS
CALGARY — Discount carrier WestJet Airlines is taking a $47.6 million charge on its books for the early replacement of 18 of its remaining older aircraft.
The Calgary company (TSX: WJA) announced today that it will replace its entire fleet of 18 Boeing 737-200 series aircraft over the next year with 16 new 737 aircraft, which are cheaper to operate and use less jet fuel.
As a result of the accelerated replacement schedule, WestJet will book a $47.6 million writedown on its 2004 fourth quarter financial results that will be released next Tuesday, reflecting the early replacement of its older planes.
The 737-200 fleet consists of 15 operating aircraft and three spares, but has been costly to operate at a time of high jet fuel costs caused by rising prices for crude oil.
The company said it will get significant savings from operating a full fleet of modern, fuel-efficient jets. The new aircraft can be used more often, share a common parts pool, pilot and flight attendant training programs, flight decks, and interchangeable crews and maintenance personnel.
“We are pleased to be able to pursue this replacement strategy that, upon its completion, will likely result in WestJet having the lowest cost per available seat mile in North America,” Clive Beddoe, WestJet’s president and chief executive, said before stock markets opened Friday.
The new Boeing 737 aircraft are about 30 per cent more fuel efficient than the 737-200 aircraft so the decision to replace the fleet will lower the airline’s long-term operating costs.
WestJet (TSX: WJA) is Canada’s second-largest airline, with scheduled service to 32 North American cities and charter service to 26 destinations in eight countries. The airline operates a fleet of 56 aircraft, with 38 Boeing 737 jets.
Sign In
February 11, 2005 at 6:38 pm