2011 CIBC Institutional Investor Conference January 20, 2011 - PowerPoint PPT Presentation

2011 CIBC Institutional Investor Conference January 20, 2011

FORWARD-LOOKING STATEMENT Certain information in this presentation and oral statements made during this presentation, including any question and answer session, may contain forward-looking statements, including but not limited to our strategy, partnerships, business fare products, our rewards program including our credit card and frequent guest program, growth drivers and expansion plans for WestJet and WestJet Vacations Inc. (WVI), capacity growth and fleet expansion, fleet and cost efficiencies, hedging activities and risk management. These forward-looking statements are subject to, and may be affected by, numerous risks and uncertainties which may cause WestJet’s actual results may differ materially from a conclusion, forecast or projection expressed in or implied by such statements. Material risks and the material factors and assumptions applied in formulating these, and the material factors that could cause actual results to differ from the forward-looking statements, are discussed in our public reports and filings which are available under WestJet’s profile on SEDAR (www.sedar.com) and 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. 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. January 20, 2011 2

3 Miles (billions) - 1.0 2.0 3.0 4.0 5.0 Q4 2008 Q1 2009 Growth Story Continues ASMs Q2 2009 Q3 2009 RPMs Q4 2009 Q1 2010 Load Factor % Q2 2010 Q3 2010 Q4 2010 0% 10% 20% 30% 40% 50% 60% 70% 80% Load Factor %

14 Years of Growth WestJet Destinations Served* Domestic Transborder Mexico Caribbean 80 71 66 70 17 60 13 51 6 50 6 44 7 35 4 5 40 34 17 17 2 31 1 12 11 30 11 11 7 20 31 30 28 26 24 24 23 23 21 10 20 15 12 9 8 8 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 *Destinations Served at Year-End 4

Recovering Economy = Pricing Power 100.0% 20.00 90.0% 18.00 Load Factor % Yield (cents) 80.0% 16.00 70.0% 14.00 60.0% 12.00 50.0% 10.00 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Load Factor % Yield (cents) 5

Costs Remain Under Control 16 1.7 14 2.2 1.9 1.2 0.9 ) 1.2 M 12 S 4.7 3.5 r A 3.4 3.3 3.5 3.2 10 e p 8 ts n 6 e (c 8.9 8.7 8.7 8.5 8.5 8.5 4 2 0 5 6 7 8 9 0 0 0 0 0 0 1 0 0 0 0 0 0 2 2 2 2 2 2 M 9 CASM (ex fuel) Fuel Op. Margin • Excludes reservation system impairment of $31.9 million in 2007 6

Measured Capacity Growth Flexible fleet plan expansion until 2017 Compounded average annual growth rate: 35000 Min ~4%, Max ~ 7% 30000 25000 ) s 3% 10 - 11% 18% n o 20000 i ll m i ( s 15000 M S A 10000 5000 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 106 Aircraft 135 Aircraft Leased 24 33 38 43 44 44 44 44 44 44 Owned 52 53 53 54 58 64 70 80 88 91 Total confirmed fleet 76 86 91 97 102 108 114 124 132 135 Net change in aircraft - 10 5 6 5 6 6 10 8 3 Lease expiries - - - - - 3 - 12 8 6 7

Capital Structure At September 30, 2010: - Cash of C$1,218 million 1400 6 - Cash to TTM of revenues ratio of 49% - Current ratio of 1.50x 1200 5 - Adjusted debt to equity ratio of 1.38x 1000 - Adjusted net debt to EBITDAR of 1.81x 4 $ millions 800 Initiated a quarterly dividend times 3 - $0.05 per share for 1st quarterly payout 600 - Record date Dec 15, 2010, paid out Jan 21, 2011 2 400 Normal Course Issuer Bid 1 - TSX approved 7,264,820 shares or ~ 5% 200 - 2,338,730 shares re-purchased to date for total 0 0 price of ~ $31million 2005 2006 2007 2008 2009 Q3 2010 - Program to run from Nov 5, 2010 to Nov 4, 2011 - Purchase on open market and cancel Cash Adj. net Debt/EBITDAR Adj. Debt/Equity Note: All figures are full-year figures, except for 2010 data. Debt ratios include aircraft operating leases. 8

Fireside Chat Questions & Answers

Appendix

WHAT MAKES WESTJET STAND OUT? • Consistently one of the most profitable airlines in North America -22 consecutive quarters of profitability -Industry leading operating margins • Consistently one of the lowest- cost operators in North America • Planned profitable growth supported by a strong balance sheet • Flexible fleet expansion plan and seasonal deployment strategy • Provides a world-class guest experience • One of Canada’s most admired corporate cultures 11

STRATEGY - Working since day one By 2016, WestJet will be one of the five most successful international airlines in the world People WestJet Single fleet and Vacations type Culture Revenue Costs and and Rewards Cost efficiency program Growth Margins Guest Experience Business and Risk traveller Performance management 12

Building on our capabilities

BUSINESS TRAVELLER Building strength in this high-yield market Airline partnerships Business Fare Products Many items that we may choose to bundle together but yet to be determined: Opening the world up to our guests: • Refundable tickets • Providing the business traveller with • Pre-reserved seating international travel options • Waive change and cancel fees • Incremental revenue opportunities • Ability to early show • Select strategic carriers in each major world • Buy-on-board region • Lounge access • Continue implementing new partnerships • Other new initiatives throughout 2011 14

REWARDS PROGRAM Straight to the bottom line Credit card Frequent Guest Program Appeals to the mass market: Appeals to the high frequency traveller: • Fully accretive to WestJet • Simple and transparent program • Strong partnership with RBC for awareness • Targeted at the traveller doing four to 40 • Simple and transparent trips per year • Two types of cards; different earning power • Aims to capture additional high-yielding • Uptake is in-line with expectations guests • Uptake is in-line with expectations 15

MARKET SHARE GROWTH DRIVERS Currently serving a portion of addressable market 50 • Growing brand strength 45 • Guest experience 40 • Culture 35 • WestJet Vacations ) % 30 ( e • Rewards program r a h 25 S • Airline partnerships t e 20 k r a • New destinations M 15 • New non-stops 10 • Increased frequencies 5 0 4 5 6 7 8 9 0 1 2 3 4 5 6 0 0 0 0 0 0 1 1 1 1 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 2 2 2 Domestic Transborder International 16 • Capacity-share calculation based on data from IATA-SRS. • Mexico / Caribbean capacity share does not include charters.

WESTJET VACATIONS Leveraging our strengths in a new marketplace Estimated leisure market size in Canada •One of the fastest growing vacation 25 operators in Canada 20 Outside of current scope; might be •Large market opportunity available to able to capture a $10.9 15 capture small percentage of $ b n this segment 10 •Integrated approach with WestJet taps $5.0 WestJet Vacations addressable market 5 multiple demand streams segments are ITC $5.0 and FIT 0 •Competitive advantage with flexible Outbound Domestic Market Size product combinations and scheduled ITC Market FIT Market Leisure Retail Market service to all destinations allowing more Source: internal estimates booking options FIT – Flexible itinerary travel ITC – Inclusive 17

One of the lowest-cost carriers in North America

SINGLE FLEET – BOEING NG 737 Keeping efficiency high A single fleet and single class of service: • Simplifies operations • Enhances operational productivity • Offers an operating cost advantage • Provides more consistent guest experience 19

COST EFFICIENCY Removing costs where possible 90.0% Cost efficiencies have led to low 85.0% break-even load factor 80.0% 75.0% • Cost efficiencies are driven by: 70.0% - High utilization of aircraft 65.0% - High employee productivity 60.0% - Single-fleet efficiencies n a t e n s a d t t a s n e a d t u e a y k l e a J t l a r a e c s i w B T i t - Ownership culture i a n n g s w D r t h e r l a U e e e r A i t i C l W m J A u A l A o - Disciplined focus on expenditures A r S i S A U YTD Q3 2010 Load Factor YTD Q3 2010 Break-even Load Factor Source: Internal estimates, company reports 20

RISK MANAGEMENT Protecting against external volatility • Fuel price volatility - fuel is approximately 20% hedged for next 12 months - combination of CAD$ WTI and USGC JET swaps, collars and call options - CAD$ is partially a natural hedge against WTI • Foreign exchange volatility - Aircraft debt repayments fixed in CAD$ for term of debt - Next 12 month aircraft US$ leasing costs approximately 90% hedged into CAD$ Interest rate volatility - Long-term aircraft debt has fixed interest rates averaging 5.3% 21

We have the financial strength to put our strategy into action