September 08, 2005 08:30 ET

WestJet Announces Fuel Risk Management Strategy

CALGARY, ALBERTA--(CCNMatthews - Sept. 8, 2005) - WestJet (TSX:WJA) today announced that it has implemented a disciplined fuel-risk-management strategy using financial instruments to help mitigate the effects of volatile fuel prices. This approach to fuel-risk management addresses the unique challenges airlines face with respect to the sale of advanced tickets in an environment where future costs are uncertain.

Airline passengers typically purchase seats for travel weeks or months in advance of their planned travel date. The price paid for those seats is partially based on the price of fuel on the date of purchase. Because of the rapidly increasing price of fuel in recent months, the actual cost to fly a passenger can be considerably higher on the date of travel than it was when the seat was sold.

To mitigate the effect of volatile fuel prices, WestJet has bought forward a portion of its exposure to USGC Jet Fuel in Canadian dollars over a term and quantity that relates to the airline's advanced ticket sales. For the months of September, October and November, WestJet has fixed approximately 40%, 20% and 10%, respectively, of its expected fuel consumption at a rate of $0.707 CAD/litre.

WestJet is Canada's leading low-cost airline offering scheduled service throughout its 34-city North American network. Named Canada's most respected corporation for customer service in 2005, WestJet pioneered low-cost high-value flying in Canada. With increased legroom and leather seats on its modern fleet of Boeing Next-Generation 737 aircraft, and live seatback television provided by Bell ExpressVu on its 737-700 fleet, WestJet strives to be the number one choice for travellers.

Contact Information

  • WestJet
    Media Relations:
    Gillian Bentley
    (403) 444-2615
    Website: www.westjet.com