STAYING TRUE BofAML Global Transportation Conference May 19 2011
FORWARD-LOOKING STATEMENT Certain information in this presentation and statements made during this presentation, including any question and answer session, may contain forward-looking statements, including but not limited to, those regarding projected economic indicators, future expansion plans for WestJet and WestJet Vacations Inc. (WVI), capacity growth, fleet expansion, potential interline and code-share agreements, ASM, RASM, CASM and future revenue and profits, implementation of the new reservation system, the reward program and co-branded credit card, cost-saving initiatives, addition of new destinations, market-share and business travel expansion, hedging activities and ancillary revenue expansion. Certain material factors and assumptions were applied in formulating these forward-looking statements. These forward-looking statements are subject to, and may be affected by, numerous risks and uncertainties which may cause WestJet s actual results to differ materially from a conclusion, forecast or projection expressed in or implied by such statements. Factors that could cause or contribute to these differences include, but are not limited to: changes in government policy, exchange rates, interest rates, disruption of supplies, volatility of fuel prices, terrorism, general economic conditions, the competitive environment and other factors described in WestJet s public reports and filings which are available under WestJet s profile on SEDAR (www.sedar.com). Forward-looking statements are subject to change and WestJet does not undertake to update or revise any forward-looking information as a result of any new information, future events or otherwise, except as required by applicable law. May 2011 2
WESTJET S STRATEGY WORKING SINCE DAY ONE By 2016, WestJet will be one of the five most successful international airlines in the world WestJet Vacations Rewards program Business traveller Revenue and Growth People and Culture Guest Experience and Performance Costs and Margins Single fleet type Cost efficiency Risk management 3
GROWTH AND STRONG FINANCIAL PERFORMANCE CONTINUES
5 4 3 2 1 0 5 80% 70% 60% 50% 40% 30% 20% 10% 0% Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Miles (billions) Q1 2011 Load Factor % OUR GROWTH CONTINUES ASMs RPMs Load Factor %
RECOVERING ECONOMY = PRICING POWER 100% 20.00 90% 18.00 Load Factor % 80% 70% 16.00 14.00 60% 50% Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Yield (cents) Q1 2011 12.00 10.00 Load Factor % Yield (cents) 6 *Yield for 2008 & 2009 based on CGAAP, while 2010 & 2011 yield is based on IFRS. Difference between CGAAP and IFRS is not material, for example 2010 difference is only 0.01 0.02 cents.
GROWING DESTINATIONS WestJet Destinations Served* 80 Domestic Transborder Mexico Caribbean 71 66 70 60 51 13 17 50 40 30 34 31 35 1 7 11 11 44 5 2 11 7 4 12 6 6 17 17 20 24 24 26 28 30 31 20 21 23 23 10 15 12 8 8 9 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 *Destinations Served at Year-End 7
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MEASURED CAPACITY GROWTH FLEXIBLE FLEET PLAN EXPANSION UNTIL 2018 2010 2011 2012 2013 2014 2015 2016 2017 2018 Leased 38 43 44 44 44 44 44 44 44 Owned 53 54 56 61 65 74 82 88 91 Total confirmed fleet 91 97 100 105 109 118 126 132 135 Net change Leased 5 5 1 0 0 0 0 0 0 Net change Owned 0 1 2 5 4 9 8 6 3 Total Net Change 5 6 3 5 4 9 8 6 3 44 9 Lease expiries 0 0 0 3 0 12 8 6 4 Lease expiries have options to renew By 2018 Opportunity to have between 102 to 135 aircraft Recent deferrals have improved alignment of deliveries and lease returns. 33
COST EFFICIENCY REMOVING COSTS WHERE POSSIBLE 85.00% 80.00% Cost efficiencies have led to low break-even load factor 75.00% 70.00% 65.00% 60.00% Southwest WestJet* US Airways American JetBlue Air Canada* Alaska Delta United Cost efficiencies are driven by: - High utilization of aircraft - High employee productivity - Single-fleet efficiencies - Self service - Ownership culture - Disciplined focus on expenditures 2010 Load Factor 2010 Break-even Load Factor 10 * WJ & AC restated to IFRS. Under CGAAP WJ 72.3% and AC 78.6% Source: Internal estimates, company reports
COSTS REMAIN UNDER CONTROL 16 (cents per ASM) 14 12 10 8 6 4 2 1.9 2.2 1.7 1.3 1.2 1.0 3.4 3.5 4.7 3.2 3.5 3.5 8.7 8.9 8.5 8.5 8.6 8.9 0 2006 2007 2008 2009 2010 2010* *IFRS basis CASM (ex fuel) Fuel Op. Margin 11 Excludes reservation system impairment of $31.9 million in 2007
FINANCIALLY SOUND FY 2010 WESTJET RANKS AMONG THE TOP IN THE INDUSTRY 20.0% 16.0% 16.0% 12.9% Adjusted EBT Margin 12.0% 8.0% 4.0% 10.9% 7.8% 5.9% 5.2% 4.8% 4.6% 4.3% 3.6% 3.3% 2.3% 0.0% 0.2% -4.0% Ryanair Singapore Alaska WestJet Southwest Note on YTD comparatives: all FY 2010 (Dec. 2010) except: EasyJet United Delta JetBlue British Airways GOL Qantas Air Canada -2.3% American BA 6 months ended Sept. 2010 EasyJet 12 months ended Sept. 2010 Qantas 6 months ended Dec. 2010 GOL 9 mounts ended Dec. 2010 12 Singapore 9 months ended Dec. 2010
FINANCIALLY SOUND Q1 2011 WESTJET RANKS 2 nd AMONG NORTH AMERICAN AIRLINES 20% 15% 14.1 % 10% 8.7 % 5% 5.1 % 0% 1.4 % 0.6 % -5% (1.6)% (3.7)% (5.0)% (5.4)% -10% (7.3)% Allegiant WestJet Alaska Southwest JetBlue United continental US Airways Delta Air Canada American Q1 2011 adjusted EBT Margin per reported results (adjusted for special items and non-op mark-to-market hedge gains/losses) 13
BUILDING ON OUR CAPABILITIES
WESTJET VACATIONS LEVERAGING OUR STRENGTHS IN A NEW MARKETPLACE 25 Estimated leisure market size in Canada One of the fastest growing vacation operators in Canada $ b n 20 15 10 5 0 $10.9 $5.0 $5.0 Outbound Domestic Market Size ITC Market FIT Market Leisure Retail Market Source: internal estimates FIT Flexible itinerary travel ITC Inclusive Outside of current scope; might be able to capture a small percentage of this segment WestJet Vacations addressable market segments are ITC and FIT Large market opportunity available to capture Integrated approach with WestJet taps multiple demand streams Competitive advantage with flexible product combinations and scheduled service to all destinations allowing more booking options 15
AIRLINE PARTNERSHIPS Strategically selecting carriers in each major world region Seamless access to more destinations International travel options for the business traveller Innovative approach to code share Selective approach keeps costs in line
REWARDS PROGRAM CREATING FURTHER LOYALTY Credit card Frequent Guest Program Appeals to the high frequency traveller: Appeals to the mass market: Fully accretive to WestJet Strong partnership with RBC for awareness Simple and transparent Two types of cards; different earning power Uptake is in-line with expectations Simple and transparent program Targeted at the traveller doing four to 40 trips per year Aims to capture additional high-yielding guests Uptake is in-line with expectations 17
ENHANCED EASTERN TRIANGLE SCHEDULE IMPROVED VALUE FOR BUSINESS TRAVELERS Expanded schedule Toronto to Montreal Montreal to Toronto Toronto to Ottawa Ottawa to Toronto Summer 2011 Summer 2011 Depart Arrive Depart Arrive 0700 0810 0700 0815 0800 0910 0800 0915 0900 1010 0900 1015 1200 1310 1200 1315 1400 1510 1400 1515 1600 1710 1600 1715 1700 1810 1700 1815 1800 1910 1800 1915 1930 2040 1900 2015 2230 2340 2030 2145 Summer 2011 Summer 2011 Depart Arrive Depart Arrive 0700 0800 0700 0759 0800 0900 0800 0859 0900 1000 0930 1029 1200 1300 1200 1259 1400 1500 1400 1459 1600 1700 1600 1659 1730 1830 1700 1759 1830 1930 1800 1859 2230 2330 1930 2029 18
WE HAVE THE FINANCIAL STRENGTH TO PUT OUR STRATEGY INTO ACTION
CAPITAL STRUCTURE $ millions 1400 1200 1000 800 600 400 200 6 5 4 3 2 1 times At March 31, 2011: - Cash of C$1,252 million - Cash to TTM of revenues ratio of 45% - Working Capital ratio of 1.47x - Adjusted debt to equity ratio of 1.58x - Adjusted net debt to EBITDAR of 1.51x Initiated a quarterly dividend - $0.05 per share - Record date Dec 15, 2010, paid out Jan 21, 2011 - Record date Mar 16, 2011, paid out Mar 31, 2011 0 2005 2006 2007 2008 2009 2010* Q1 2011* Cash Adj. net Debt/EBITDAR Adj. Debt/Equity 0 Normal Course Issuer Bid - TSX approved 7,264,820 shares or ~ 5% - 4,179,092 shares re-purchased as of May 3, 2011 for total price of ~ $60 million - Program to run from Nov 5, 2010 to Nov 4, 2011 - Purchase on open market and cancel *2010 and 2011 presented under IFRS. Note: All figures are full-year figures based on trailing twelve months. Debt ratios include aircraft operating leases. 20
WE HAVE TAKEN OFF WHEELS UP We have a very strong culture and highly engaged workforce We have a strong brand in the market place We continue to be among top tier in earnings margins in the industry We are a well-positioned, low-cost and efficient carrier We have a highly attractive combination of planned growth and strong balance sheet 21
For further information: Hugh Harley Director, Investor Relations P: (403) 539-7594 E: hharley@westjet.com W: www.westjet.com