Staying True

We've stayed true to the business principles that have allowed steady and measured growth since WestJet took to the skies 15 years ago - a business model that's focused on people, flying a single fleet type and keeping our costs in check. In 2010, WestJet embarked on a number of new initiatives, increasing our focus on guest experience and announcing agreements with other airlines. With a solid foundation, WestJet, along with our more than 8,000 caring WestJetters, stayed true to our values, showing the world that staying true doesn't mean staying the same.

President's Messageto ShareholdersMarch 16, 2011

Since my appointment as President and Chief Executive Officer in April 2010, my appreciation for the power and effectiveness of an engaged workforce and its ability to execute on a solid business plan has only grown. I am honoured to be associated with and lead a team of exceptional WestJetters, and 2010 was another example of the great results that are achievable by staying true to the things that have made WestJet a success since its inception in 1996.

Along with my new title and responsibilities came questions about what I might plan to change or how I would shake things up with the airline. Well, the fact of the matter is that there is no revolution required at WestJet. The formula of providing caring guest experiences, keeping costs low and offering high value has been working for 15 years and I believe that WestJet will continue to be the envy of the airline industry.

In a year filled with economic uncertainty, 2010 followed one of the worst recessions in recent history. Despite these challenging conditions, the airline industry saw demand for air travel and consumer confidence gradually return. With an operating margin of 9.5 per cent and an earnings before tax margin of 7.5 per cent in 2010, WestJet was again one of the top-performing airlines in North America.

Our business model, founded on a single fleet type strategy, continued to demonstrate value by staying true to our low-cost philosophy, our people and our guests. We haven't made cost reduction an official program at WestJet because keeping a close eye on costs is fundamental to the way that WestJetters do business every day.

I'm proud of WestJetters and the caring way that we safely flew more than 15 million guests in 2010. WestJetters are the foundation of the WestJet brand and we have a steadfast focus on maintaining our strong culture and excellent guest experience. These foundational strengths were exemplified by our 2010 induction into Canada's Most Admired Corporate Culture Hall of Fame and winning the Airline Staff Service Excellence Award North America at the World Airline Awards in Hamburg, Germany. Just last month, we were named a J.D. Power 2011 Customer Service Champion by the prestigious global marketing information services company, J.D. Power and Associates.

Last year, we began to capitalize on the significant investments made in our reservations systems, and we started to benefit from some of the revenue growth opportunities that these investments afford us. We implemented our first code-share agreement and added additional interline partners. We launched the WestJet Frequent Guest Program and WestJet Credit Card Program with rewards that are easy to understand and redeem.

We continued growing our WestJet Vacations business and its brand by leveraging our existing scheduled network. With the introduction of many new sun destinations in the last few years, WestJet Vacations has become a significant player in the Canadian tour operator industry. In four short years, WestJet Vacations has become the number one Canadian provider of hotel rooms to Las Vegas, with additional strength into the Orlando, California and Hawaii markets, along with the popular Caribbean and Mexico markets. WestJet Vacations is important to our growth as an airline and will be a key component of our future success.

In 2010, we made the decision to introduce a quarterly dividend and a share buy-back program. These initiatives speak to our confidence to consistently generate positive cash flow while maintaining a healthy balance sheet.

Outlook

As we move forward, we will stay true to our strategy of profitable and measured growth. In 2011, we plan to increase our airline partnerships by implementing three to four code-share agreements and signing on additional interline partners. This will drive more guests into our network and expand our global reach by offering our guests access to new destinations. Our long-term objective is to have a code-share partner from each of the major geographic regions of the world.

In 2011, we will add fare products that increase flexibility for the business traveller and grow our schedule to make it even more convenient through improved frequencies and code-share relationships. With reservation system enhancements and frequent guest programs now firmly in place, we expect 2011 to be a banner year in attracting incremental business travellers.

Over the past several months, as part of our ongoing fleet planning review and strategy, we chose to defer the delivery of nine aircraft to 2017 and 2018 that were previously scheduled to be delivered between 2011 and 2015. The entirety of our order with Boeing remains intact, but the revisions allow us to better match the timing of aircraft deliveries with the dates for potential lease returns. This allows us to accelerate or decelerate capacity growth, dependent on economic and market conditions, without deviating from our long-term growth strategy.

Our long-term vision remains the same - to become one of the most successful airlines in the world by 2016. This does not mean that we will be among the largest, fly the most aircraft or go to the most destinations. Rather, we want to be top five in brand strength, on-time performance, profit margin, culture and guest loyalty and satisfaction.

As WestJet continues to grow, having just celebrated our 15th birthday, we will stay true to the business model that has produced 55 out of 57 profitable quarters. A low-cost structure and a caring guest experience will remain the foundations of success for WestJet as we move toward our 2016 vision. A culture of engagement, where doing the right things for our business happens each day, will be fostered by all WestJetters.

Staying true should not be misinterpreted as status quo. WestJet will continue to evolve as the complexity of the airline business changes with advancements in technology, ongoing consolidation, and ever-changing market and consumer demands. We will embrace change and always stay true to our people, our guests and our shareholders.

In summary, WestJet's 2010 results proved again that our measured growth strategy continued to deliver profitable results. We are confident in our business model and our ability to consistently generate positive cash flow, maintain a strong balance sheet and fund our growth objectives. WestJet's brand strength and visibility are growing with additional frequencies in key Canadian business markets, further expansion in the vacations market and an expanding global reach with airline partnerships. Combined with the commitment of all WestJetters to the strong underlying fundamentals of our low-cost structure and the revenue opportunities that lie ahead with a strengthening economy, we believe that 2011 will be another exciting year of growth, success and profitability for WestJet.

On behalf of the Board of Directors, Executive team and more than 8,000 WestJetters, I thank all of our shareholders and guests for their ongoing support and loyalty.

Gregg Saretsky
President and Chief Executive Officer
March 16, 2011


Caution regarding forward-looking statements

Certain information set forth in this online version of WestJet's 2010 Annual Report, including information regarding our ability to generate positive cash flow while maintaining a healthy balance sheet, fleet expansion, our growth plans, code-share and interline agreements, and service offerings, contain forward-looking statements. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond WestJet's control. These forward-looking statements are based on our existing strategy and currently available implementation plans, agreements and bookings, but may vary due to factors including, but not limited to, changes in fuel prices, changes in guest demand, general economic conditions, competitive environment, ability to effectively implement and maintain critical systems, ability to successfully negotiate and effectively implement new partnering relationships and obtain the necessary regulatory approvals relating thereto and other factors described in WestJet's public reports and filings, which are available on WestJet's profile at www.sedar.com. Readers are cautioned that undue reliance should not be placed on forward-looking statements as actual results may vary materially from the forward-looking statements. WestJet does not undertake to update, correct or revise any forward-looking statements as a result of any new information, future events or otherwise, except as may be required by applicable law.

Staying True to OurLow-Cost Philosophy

When it comes to managing costs, every year has its challenges, and 2010 was no exception. Despite the challenges an uncertain economy can bring, we've kept our costs in check and stayed true to our promise of being a low-cost airline. We continue to fly a single type of aircraft and introduced on-board point-of-sale devices to support a cashless cabin and self-serve bag tagging in major markets across the country. WestJetters in every department continued to demonstrate their personal commitment to fiscal responsibility, which has served us well.

Trevor, Team Lead, Maintenance Programs
Staying true since 2004

Staying True to OurShareholders

After 23 consecutive quarters of profitability, we're still staying true to our bottom line and our growth strategy. WestJet introduced a quarterly dividend of five cents per share and a share buyback program in 2010. Above all, we're confident in our ability to consistently generate positive cash flow, while maintaining a healthy balance sheet.

Staying True to Our Guests

Launched in 2010, the WestJet Frequent Guest Program™ and WestJet Credit Card Program™ allows guests to earn WestJet dollars™ in a simple, transparent and flexible program. This is another example of how we show our appreciation to our guests, while providing them with the highest quality of service. With the launch of the new westjet.com in late 2010, WestJet guests now enjoy a more effective online experience that's as friendly as we are.

See president's message for cautionary note regarding forward-looking statements.
Ajit, Flight Safety Investigator
Staying true since 2007

Staying True to Our Communities

To show our appreciation for their support, WestJet provides the communities it serves with the same level of care that we provide to our guests. We've stayed true to the strong relationships we've forged with our 10 WestJet Cares for Kids charitable partners across the country to continue our focus on children's health and wellness.

WestJet Cares for Kids charitable partners include:

  • Big Brothers Big Sisters of Canada
  • Kids Help Phone
  • Boys and Girls Clubs of Canada
  • KidSport™ Canada
  • Children's hospitals and pediatric wards
  • Make-A-Wish® Canada
  • CNIB
  • Missing Children Society of Canada
  • Hope Air
  • Ronald McDonald House Charities of Canada

As WestJet grows, so does our involvement in the causes we care about. We responded quickly to the January 2010 earthquake in Haiti by donating $100,000 to the Canadian Red Cross, providing a rescue flight with much needed supplies to Port-au-Prince, and we continued our involvement by returning a year later as part of the Huddle for Haiti project. WestJetters also continued to take their involvement in community investment seriously by donating more than $90,000 to various charities helping with the relief effort.

In addition, WestJet provided the gift of flight to relief workers travelling to Florida and the Dominican Republic on their way to Haiti to assist with the rebuilding efforts.

Ellen, Intermediate Planner, Engines and Components
Staying true since 1999

Staying True to Future Growth

With another successful year behind us, we remain focused on the future. We're planning to expand our modern fuel-efficient fleet of Next-Generation Boeing 737s with six aircraft scheduled for delivery in 2011. Since WestJet currently only serves 20 per cent of the potential addressable market within range of our fleet, we've still got lots of room to grow.

We're applying our stay-true approach to the way we're growing our network. We will extend our network with select partners in code-share and interline agreements, choosing only the partners who complement the way we do business. In 2010, we proudly announced WestJet's code-share agreement with Cathay Pacific, and our first U.S. interline agreement was signed with American Airlines. Our intention to evolve the relationship with American Airlines to include code-sharing and frequent flyer co-operation has since been announced, marking another important milestone in our growth strategy.

WestJet Vacations benefited from another successful year and expanded to more sunny destinations in 2010. With the Softvoyage reservation system now firmly in place, travel agents have better access to our vacations products and that means even more guests will experience our fun, friendly and caring vacation packages. No matter the destination, we will continue to remain true to our guests by providing caring service from beginning to end.

See president's message for cautionary note regarding forward-looking statements.
Allison, Customer Service Agent, Calgary
Staying true since 2006

Staying True toWhere We're Going

Staying true doesn't mean staying the same. To WestJet, it means remaining as committed as ever to what matters and selecting opportunities to grow in a measured way. Thanks to our strong foundation and focus on people, we're prepared to adapt our business to ever-changing market realities.

In January 2011, WestJet began charging for a second checked bag. We believe that this fee strikes the right balance for our guests and our bottom line. By charging a fee for a second checked bag, we can focus the incremental costs of services to those who use them, rather than raising prices for all guests.

As we expand our services to business travellers, we're also ensuring that our leisure guests have the opportunity to experience a caring holiday with WestJet Vacations. To see all of the destinations WestJet serves, take a look at our new interactive route map.

Our 15 years of success is a result of the constant dedication of WestJetters to friendly smiles and caring service. While staying true to where we started, we'll continue to capitalize on this solid foundation and the investments we've made in our people and our business as we grow to become one of the most successful international airlines in the world. Along the way, we'll make sure that everyone who chooses to fly with us enjoys a truly memorable guest experience.

See president's message for cautionary note regarding forward-looking statements.
Brian, Captain
Staying true since 1997

Westjetters CareAbout Staying True

Our caring WestJetters prove they are the best, over and over again. As we continue to foster an environment where WestJetters are proud to be aligned with the airline's goals and direction, we are strengthening our culture, great guest experience and value to our shareholders.

Natalie, Communications Advisor
Staying true since 2006

Staying True to Our People

In 2010, WestJetters were introduced to a new flexible benefits plan and more than 8,000 caring WestJet owners were paid more than $16.8 million of profit share. WestJet will remain connected to its people in the old-fashioned face-to-face way (we're a friendly airline, after all), while also using new technology to reach our diverse and growing workforce of caring, dedicated individuals.

In 2010, WestJet was once again recognized for its commitment to WestJetters and providing a great employment experience by being inducted into Waterstone Human Capital's Canada's 10 Most Admired Corporate Cultures Hall of Fame, and was named among Hewitt Associates 50 Best Employers in Canada.

Vito Culmone

Executive Vice-President,
Finance and CFO

Bob Cummings

Executive Vice-President,
Sales, Marketing and Guest Experience

Hugh Dunleavy

Executive Vice-President,
Strategy and Planning

Cam Kenyon

Executive Vice-President,
Operations

Ferio Pugliese

Executive Vice-President,
People and Culture

Gregg Saretsky

President and CEO

Clive Beddoe

Chairman
WestJet Airlines Ltd.

Hugh Bolton

Non-Executive Chairman
EPCOR Utilities Inc.

Ron Brenneman

Former CEO
Petro-Canada

Brett Godfrey

Former CEO
Virgin Blue Airlines

Don Hougan

Captain, PACT Chairman
WestJet Airlines Ltd.

Allan Jackson

President and CEO
Arci Ltd.

S. Barry Jackson

Chairman
TransCanada Corporation and
TransCanada Pipelines Ltd.

Wilmot Matthews

President
Marjad Inc.

Larry Pollock

President and CEO
Canadian Western Bank
and Canadian Western Trust

Gregg Saretsky

President and CEO
WestJet Airlines Ltd.

Arthur Scace

Former Chairman
Bank of Nova Scotia

Corporate Information

Stock Exchange Listing

Shares in WestJet stock are publicly traded on the Toronto Stock Exchange under the symbols WJA and WJA.A.

Investor Relations Contact Information

Phone: 1-877-493-7853
Email: investor_relations@westjet.com

WestJet Headquarters

22 Aerial Place NE
Calgary, Alta. T2E 3J1
Phone: 403-444-2600
Toll-free: 1-888-293-7853

Annual General Meeting (AGM)

WestJet Airlines Ltd.'s AGM will be held at 2 p.m. (MDT) on Tuesday, May 3, 2011, at WestJet's Campus, 22 Aerial Place NE, Calgary, Alta.

Transfer Agent and Registrar

CIBC Mellon Trust Company
Toll-free in North America: 1-800-387-0825
cibcmellon.com

Auditors

KPMG LLP, Calgary, Alta.