Annual Information Form 2009
Total Page:16
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ANNUAL INFORMATION FORM 2009 March 15, 2010 OUR DESTINATIONS AT MARCH 15, 2010 WestJet Airlines Ltd. 2009 Annual Information Form - 1- TABLE OF CONTENTS EXPLANATORY NOTES ........................................................................................................................... 3 ABOUT US................................................................................................................................................... 7 CORPORATE STRUCTURE ...................................................................................................................... 7 OUR INDUSTRY AND COMPETITIVE ENVIRONMENT ..................................................................... 9 REGULATORY ENVIRONMENT ........................................................................................................... 10 DESCRIPTION OF OUR BUSINESS ....................................................................................................... 13 CAPITAL STRUCTURE ........................................................................................................................... 37 DIVIDEND POLICY.................................................................................................................................. 43 MARKET FOR SECURITIES ................................................................................................................... 44 DIRECTORS AND EXECUTIVE OFFICERS.......................................................................................... 45 MATERIAL CONTRACTS ....................................................................................................................... 53 LEGAL PROCEEDINGS........................................................................................................................... 53 INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS.......................... 54 INTERESTS OF EXPERTS....................................................................................................................... 54 RISKS AND UNCERTAINTIES ............................................................................................................... 54 PRIVACY................................................................................................................................................... 60 TRANSFER AGENT AND REGISTRAR................................................................................................. 60 ADDITIONAL INFORMATION............................................................................................................... 60 WestJet Airlines Ltd. 2009 Annual Information Form - 2 - EXPLANATORY NOTES Consolidation - References to “WestJet,” “our Company,” “our,” “we,” and “us” refer to WestJet Airlines Ltd. and its subsidiaries, including the WestJet Partnership (the “Partnership”) and the accounts of five special purpose entities, which are utilized to facilitate the financing of aircraft, as a combined entity, except where the context otherwise requires. We have no equity ownership in the special purpose entities; however, our Company is the primary beneficiary of the special purpose entities’ operations. All intercompany balances and transactions have been eliminated. Currency - All currency amounts are stated in Canadian dollars, unless otherwise noted. Effective - All information is stated as at December 31, 2009, unless otherwise indicated. Cautionary statement regarding forward-looking information and statements - This Annual Information Form (“AIF”) offers our assessment of WestJet’s future plans and operations and contains forward-looking statements as defined under applicable Canadian securities legislation, including our expectation that security charges are expected to increase approximately 50 per cent effective April 1, 2010, referred to under the heading “The Security Charge” on page 12; our expectation that the amended Open Skies Agreement may provide us with expanded marketing opportunities to broaden our network and expand our reach, referred to under the heading “International and Transborder” on page 13; our expectation that we may need to undertake safety and operational audits by foreign carriers in order to demonstrate regulatory compliance for code-share implementation, referred to under the heading “Code- Share Agreements” on page 13; our expectation that we plan to continue expanding and to capitalize on the greater traffic opportunities available in the Canadian, transborder and international markets, referred to under the heading “Routes and Scheduling” on page 14; our expectation that we will serve 17 U.S. destinations and 21 international destinations based on our enhanced 2010 summer schedule, referred to under the heading “Routes and Scheduling” on page 14; our expectation that we anticipate demand will be stimulated from guests who would not otherwise travel, referred to under the heading “Routes and Scheduling” on page 15; our expectation that leisure markets will continue to provide significant growth opportunities through the strategies identified, referred to under the heading “Route Opportunities” on page 15; our expectation that our new WestJet Vacations reservation system should set the foundation for continued growth of all distribution channels for this business, referred to under the heading “WestJet Vacations” on page 16; our expectation that WestJet Vacations will be a key contributor to the future success of our airline, referred to under the heading “WestJet Vacations” on page 16; our expectation that we anticipate expanding our interline cargo agreement with Southwest Airlines Co. to include other markets where we connect with Southwest, referred to under the heading “Cargo” on page 16; our future confirmed aircraft deliveries, including timing of delivery, size of aircraft to be delivered, lease expiries and possible lease renewals, referred to under the heading “Fleet” on page 18; our expectation that our revised fleet plan aligns with the current and planned launch of interline and code-share partnerships, the continued rapid growth of our WestJet Vacations business and our plans to grow our share of the business-traveller market, referred to under the heading “Fleet” on page 19; our expectation that we will continue to develop value-added products aimed at making our guests more comfortable during their journey, referred to under the heading “Products and Services” on page 20; our expectation that our Frequent Guest and Credit Card programs will increase our competitive position in the business/frequent flyer market and, through mass-market participation in the credit card programs, contribute to our ancillary revenue streams, referred to under the heading “Frequent Guest and Credit Card Programs” on page 22; our expectation that SabreSonic will ensure we can properly support our evolving business model and allow us to continue to develop and deliver ancillary revenue opportunities and provide the platform to operate industry-standard airline partnerships, referred to under the heading “Reservation Systems” on page 22; our expectation that we are well on our way back to delivering the world-class WestJet Airlines Ltd. 2009 Annual Information Form - 3 - guest experience our guests deserve and have come to expect, referred to under the heading “Reservation Systems” on page 23; our expectation that Softvoyage’s suite of products will enable WestJet Vacations to successfully expand its sales and distribution, referred to under the heading “Reservation Systems” on page 23; our expectation that WestJet Vacations new web site provides future opportunity for a more media rich guest experience, referred to under the heading “Reservation Systems” on page 23; our expectation that we will expand our strategy globally of working closely with the travel trade as we enter new international and transborder markets, referred to under the heading “Travel Agents” on page 24; our expectation that Air Canada’s objective to become more active in the travel trade space through enhanced compensation models could potentially slow down the rate at which agencies move business to WestJet, referred to under the heading “Travel Agents” on page 24; our expectation that having our product on as many shelves as possible will contribute to our revenue growth and brand awareness, referred to under the heading “Travel Agents” on page 24; our expectation that through-checked bags and guests with China Airlines will significantly improve the guest experience versus what is currently in place, referred to under the heading “Airline Partnerships” on page 25; our expectation that our implementation of SabreSonic® enables us to be code-share ready from a system perspective, while Southwest Airlines’ readiness has pushed deployment of the code-share beyond the late 2010 date previously announced, referred to under the heading “Airline Partnerships” on page 25; our expectation that we plan to offer the majority of our domestic network for connectivity with Air France and KLM in the future, referred to under the heading “Airline Partnerships” on page 25; our expectation that in 2010, we plan add up to four additional interline partners, with a continued focus on non-reciprocal relationships, and complemented by an expansion of route offerings within our network to which our existing and new partners can connect as another step in our strategy to increase connectivity, and bring additional travellers to our network, referred to under the heading “Airline Partnerships”