ATW Daily News

WestJet offers 'heartfelt apologies' on res system snafus; posts C$31 million profit

Thursday November 5, 2009

WestJet yesterday acknowledged that installation of the SabreSonic Customer Sales and Service reservation system last month has led to numerous complications, including a temporary website shutdown and ongoing difficulty in making changes to passengers' reservations, and asked customers for "patience" while it works out the kinks.

Details about the reservation system problems came as the Calgary-based LCC reported third-quarter net income of C$31.4 million ($29.2 million), down 45.7% from C$57.9 million earned in the prior-year period, marking its 18th consecutive profitable quarter. While the carrier is satisfied with its continuing profitability despite the recession and said it is beginning to see signs that yields are improving, it said its primary current focus is fixing the trouble points surrounding the reservation system installed Oct. 17 (ATWOnline, Jan. 30).

The front page of the WestJet website is dedicated to a message to customers explaining that the system "was successfully installed" but that complications have led to "slowdowns at airports" and "many of our [passengers spending] too long on the phone trying to get through to one of our agents. This is not the WestJet experience you have come to know and expect. . .we offer our heartfelt apologies."

President and CEO Sean Durfy told analysts and reporters yesterday that it will take "a little bit longer" to smooth out problems with the new system. "Like any enterprise IT system that goes into an organization, it's tough," he said. "This system really controls everything we do in the organization." He said the carrier's website was "down for an extended period" one day in the second half of October owing to reservation system transition problems. "That won't happen again," he insisted.

The largest problem relates to 600,000 bookings for future flights that were made before the changeover. Those bookings were "migrated" to the SabreSonic CSS system, but "the issue has become that when we needed to change or cancel, we found that it takes an awful long time on the new system," Durfy explained. "That's being worked on and we think we've found a solution." He added that "right now. . .we have no belief that [the problems] will have [a financial] impact on the [fourth-quarter] results."

The reservation system issue overshadowed another relatively solid reporting period for the carrier. Third-quarter revenue lowered 16.4% to C$600.6 million while expenses fell 15.3% to C$523.7 million, producing operating income of C$77 million, down 23.2% from C$100.3 million last year. Traffic decreased 3.2% to 3.59 billion RPMs on a 1.1% cut in capacity to 4.5 billion ASMs, producing a load factor of 79.7%, down 1.7 points. Yield lowered 13.7% to C16.74 cents as RASM dipped 15.5% to C13.34 cents and CASM dropped 14.4% to C11.63 cents. CASM excluding fuel rose 2.5% to C8.16 cents.

by Aaron Karp

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