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| Last updated at 1:04 AM on 31/12/08 |
WestJet stock up by half in last month 
The Canadian Press
TORONTO — WestJet Airlines Ltd. stock (TSX:WJA) climbed more than eight per cent Tuesday — up by half from its late-November low thanks to declining fuel costs and optimism about the company’s business model.
Shares in the Calgary-headquartered airline closed at $12.95, up by 98 cents on the Toronto Stock Exchange session. The stock has revived strongly from a Nov. 21 low of $8.34, though it’s still down from a peak of over $22 late last December.
That high came before crude oil spiked to a record US$147 a barrel in July while the slumping U.S. economy eroded expectations for business and leisure travel.
Now oil is back under $40 a barrel, and WestJet’s low-cost fleet of 76 relatively new Boeing 737s, with 45 more to be added over the next five years, is seen as a major advantage against bigger and less flexible competitors in a tight travel market.
“We like the stock, we like the outlook; we think low-fare airlines do well in tough economic times because people switch over from legacy airlines,” Jacques Kavafian, an analyst at Research Capital Corp., said in an interview.
“And with fuel prices having come down a lot — put that all together, we think the outlook for WestJet is pretty good.”
The single aircraft type simplifies maintenance and training and the 12-year-old airline has been rapidly adding destinations, not only within Canada but in the United States and the Caribbean.
Last week it finalized a code-sharing arrangement with Southwest Airlines, regarded as the most efficient U.S. carrier, that will see the two airlines will sell tickets on each other’s flights by late 2009.
WestJet also plans to institute a frequent flyer program in the new year, and it continues to benefit from ill-will among many travellers against market leader Air Canada.
Amid widespread Christmas-season snow delays and cancellations, the Consumers Association of Canada reported getting hundreds of complaints about Air Canada, along with dozens of calls commending WestJet’s handling of the situation.
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31/12/08
© 2009 
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