U.S. strife benefits WestJet, CEO says

More tourists from Mexico choosing Canada

More Mexicans are visiting Canada due to political uncertainty in the U.S., posing an opportunity for Canadian airlines to snag a growing number of foreign tourists, according to the chief executive of WestJet Airlines Ltd.

“Certainly anecdotally, we’ve seen airports announce that the number of Mexican visitors to Canada is up,” Gregg Saretsky told analysts on a conference call Tuesday.

“As border issues and political issues continue to intensify, I think there is perhaps an opportunity for Canada to benefit from increasing foreign tourist arrivals.”

Vancouver International Airport, for example, saw the number of arrivals from Mexico jump 84.3 per cent between January and November of last year. In total, Mexican visitors to Canada rose 19.5 per cent in the first 11 months of 2016, according to Destination Canada, which promotes tourism on behalf of the federal government.

Besides a growing sense among Mexicans that they are unwelcome in the U.S., Canada also lifted its visa requirements for Mexican visitors on Dec. 1.

Closer to home, the Alberta economy appears to have “bottomed out,” leading Saretsky to predict that WestJet’s unit revenue will be positive in the first half of 2017 after eight quarters of year-over-year declines.

WestJet is very exposed to Alberta, with about 40 per cent of its capacity travelling to, from or within the province. The economy is coming out of “two horrendous years,” Saretsky said, and as it improves it will boost WestJet’s revenue per available seat mile (RASM) and return on invested capital (ROIC).

WestJet reported fourth-quarter revenue of $1.02 billion, up 6.2 per cent. Profit fell 13 per cent to $55.2 million or 47 cents a share, beating the average analyst estimate of 40 cents a share.