Financial Management – Westjet Financial Analysis

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Environmental Factors

WestJet has the youngest and most fuel-efficient fleet in North America. Having invested time and resource in new technology which has improved the aircraft fuel-efficiency helps to save the environment while operating in a more cost effective manner.

Community Investment

WestJet takes enormous pride in the Canadian and Global community, as stated in the WestJet website “our culture of caring extends beyond our aircraft and airports and into the community at large. Across Canada we put our ides into action through three community investment programs. WestJet Cares for Kids, which works with eight national charities to positively impact children’s health and wellness (WestJet, n.d.). Showing this type of investment whether it is just positive stories told on Facebook about WestJet, or their generosity when Canadian cities are face with crisis like Fort Mac, they truly epitomize what it means to be a truly Canadian company.

Weaknesses

No Business class

Until recently, WestJet was hesitant to establish a “business class”. They will slowly start to integrate a “plus” option. But up until now people primarily travelling for business, would have chosen to fly with a WestJet competitor.

Narrowing Cost Gap

WestJet is known as a “low-cost” provider, as times continue to get tough in the Canadian economy the gap between their cost and Air Canada’s flights has become increasingly similar.

Lack of Destinations

WestJet has been focusing their growth strategy, they recently starting charting flights to Dublin, Ireland. The reoccurring issue is fuel capacity, while the Air Canada planes can make it across the ocean without a stop-over, WestJet must stop to re-fuel which adds travel-time for WestJet customers. Regardless of this point, WestJet is still lagging the Air Canada when looking at destinations.

References

Air Canada. (n.d.). About Air Canada . Retrieved from aircanada.com : http://www.aircanada.com/en/about/index.html

Globe and Mail . (2016, May 5). The Globe and Mail . Retrieved from Toronto Stock Exchange: WJA : http://www.theglobeandmail.com/globe-investor/markets/stocks/chart/?q=wja-t

Google Finance. (2016, May 8). Google Finance: WestJet Airlines Ltd. Retrieved from Google Finance: TSE:WJA

Lu, V. (2016, May 3). Weak Alberta economy saps WestJet profit . Retrieved from The Star : https://www.thestar.com/business/2016/05/03/westjet-posts-profit-despite-weak-alberta-economy.html

MSN Money . (2016, May 5). MSN Money: WestJet Airlines LTD. Retrieved from MSN.com : http://www.msn.com/en-us/money/stockdetails/analysis/fi-127.1.WJA.TSE

Pinto, A. J. (2016, February 2). WestJet profit falls as Alberta economy weakens; stock drops. Retrieved from The Airline Website: http://theairlinewebsite.com/topic/408972-westjet-profit-falls-as-alberta-economy-weakens-stock-drops/

Smith, N. (2016, February 2). Why Did WestJet Airlines Ltd. Shares Plunge 11%? . Retrieved from The Motley Fool: http://www.fool.ca/2016/02/02/why-did-westjet-airlines-ltd-shares-plunge-11/

Wall Street Journal. (2016, May 8). The Wall Street Journal. Retrieved from WestJet Arilines: WJA Financials: http://quotes.wsj.com/CA/WJA/financials

WestJet, A. I. (2016, March 18). 2015 Annual Information Form. Retrieved from sedar.com: http://www.sedar.com/CheckCode.do

Appendix A: Variance Analysis based on Income Statement (Google Finance, 2016)

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Appendix A: Variance Analysis based on Balance Sheet (Google Finance, 2016)

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Appendix B: Financial Ratio’s (Wall Street Journal, 2016)

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