CALGARY — WestJet Airlines Ltd. said Tuesday its first-quarter net income dropped 63 per cent from a year ago — in part because of the sudden departure of its chief executive officer.
The Calgary-based carrier earned $13.8 million, or 10 cents per share, compared with $37.4 million, or 29 cents per share, in the first quarter of 2009.
During the quarter, WestJet (TSX:WJA) booked a $3.7-million expense related to the resignation of Sean Durfy, who announced in March he was leaving to spend more time with his family. Durfy is expected to stay on in an advisory role until September.
The new boss, industry veteran Gregg Saretsky, has been in his role for just over a month.
In a statement, Saretsky said WestJet is happy it eked out a profit “especially in light of the challenging economic environment and rising energy costs.”
Stripped of one-time items, WestJet’s net income was $17.5 million, or 12 cents per share, compared with $35.2 million, or 29 cents per share in the first quarter of 2009.
Analysts were on average expecting earnings of 15 cents per share, according to estimates compiled by Thomson Reuters.
WestJet revenue improved to $619.8 million in the first three months of this year, up seven per cent from $579.3 million in the first quarter of 2009.
Saretsky has said he wants WestJet to dominate half of the Canadian market, intensifying already fierce competition with Air Canada (TSX:AC.B). It currently has a 38 per cent market share in Canada. He also wants to see the airline expand its reach into U.S. and international markets.
Its expansion south of the border hit a roadblock earlier this month when WestJet and Dallas-based Southwest Airlines (NYSE:LUV) ditched an agreement that would have seen two airlines sell seats on each other’s flights.
Southwest couldn’t accept changes it said WestJet had demanded be made to a deal the airlines first reached in 2008.
On the surface, the two airlines seemed like an ideal match. Both pride themselves on their cheery and easy-going corporate cultures and ability to provide low fares to their customers. Both keep their costs low by flying only one type of aircraft in their fleet — the Boeing 737.
WestJet said later it signed a agreement with Delta Air Lines with an option to acquire slots at LaGuardia Airport in New York, but an alliance deal has not been reached.
On the international front, WestJet already has plans to roll out code-share deals with Air France and the Netherlands’ KLM. Such deals allow one airline to sell seats on another, allowing passengers to travel relatively seamlessly between the two.
Building on that, WestJet wants to see traffic from Asia, South America and elsewhere in Europe come to Canada on its network.
WestJet shares were off 2.2 per cent, or 30 cents, at $13.40 on the Toronto Stock Exchange around midday Tuesday.