U.S. border policies could drive foreign visitors to Canada, WestJet CEO says

The head of WestJet Airlines says he sees a possible silver lining with the uncertainty surrounding new U.S. border policies: a boost in international visitors to Canada. (Photo by Andy Cline (CNW Group/WestJet) [CC BY-SA 4.0)

CEO Gregg Saretsky said while the airline hasn’t yet seen any jump in interest to its Canadian destinations, he believes the potential is there given the rapidly changing situation in the U.S.

“As border issues and political issues continue to intensify, I think there’s perhaps an opportunity for Canada to benefit from increasing foreign tourist arrivals,” Saretsky said Tuesday on an earnings conference call.

“We are watching with interest what’s going on with the changing political landscape. We’re working with the U.S. customs and border patrol agency to ensure that we’re following laws as we need to, but obviously that situation is very fluid and from day to day there’s pronouncements and lots of back and forth.”

Bob Cummings, WestJet’s executive vice-president commercial, said the company hasn’t seen a decline in visitors to the U.S. on its routes.

Nearly two weeks ago, U.S. President Donald Trump issued an executive order banning people from seven Muslim-majority countries from travelling to America. The order has led to confusion and anger among some with travel documentation from those nations.

A federal judge has since temporarily barred the U.S. government from enforcing the ban, but the Trump administration is appealing the ruling.

Closer to home, Saretsky said WestJet (TSX:WJA) is seeing the beginning of a turnaround in Alberta, a province where 40 per cent of the airline’s flights arrive and/or depart.

“It is clear that Alberta has been in a massive recession two years in a row,” said Saretsky.

“As Alberta crawls out of its hole, we fully expect — and we are seeing that now — signs of new life, stronger demand.”

The Alberta downturn, as well as rising costs across operations, contributed to a 19.6 per cent drop in profits from 2015.

The Calgary-based company’s net income for the 12 months ending Dec. 31 was $295.5 million, or $2.45 per diluted share. That was down from $367.5 million or $2.92 per share in 2015, a record for WestJet.

WestJet’s annual revenue increased 2.32 per cent to $4.12 billion and fourth-quarter revenue was up 6.2 per cent to $1.02 billion. Operating expenses were up 6.4 per cent for the year and 10.2 per cent for the quarter.