UPDATE 2-WestJet 3rd-qtr profit beats estimates as fuel costs fall

Tue Nov 3, 2015 11:47am EST
 
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(Adds quotes from conference call, remark from analyst)

By Allison Lampert

Nov 3 (Reuters) - Canada's WestJet Airlines Ltd reported a better-than-expected profit in the third quarter ended Sept. 30, helped by lower fuel costs and improved operating margins.

WestJet's fuel costs fell 27.9 percent to C$206.9 million ($157.8 million) in the quarter.

Fuel is usually an airline's largest variable cost, accounting for a third or more of operating expenses.

Calgary-based WestJet also announced it would introduce a new C$25 fee for checked bags on its international economy fares, starting in January 2016, as the airline challenges rival carrier Air Canada with recently introduced flights to international destinations including Europe.

"We've made this decision that we will unbundle certain services," WestJet President and Chief Executive Gregg Saretsky told a conference call with analysts.

"We're busting up the model for long-haul flying," he added.

Net earnings in the quarter rose 95 percent to C$101.8 million, or 82 Canadian cents per share, from a year earlier.   Continued...