The Financial distress of Westjet

br The Financial distress of WestJet 1

Running head : THE FINANCIAL DISTRESS OF WESTJET

The Financial distress of Westjet 1 The Financial distress of WestJet 2

Financial distress , placing in a very broad perspective , is a situation when a company is under financial pressure and incurs costs , generally known as the financial distress costs , just because of the threat of an impending bankruptcy . A firm that is in a condition of financial distress faces issues such as investment distortion , decreased revenues shortsightedness , etc , and is at times also reluctant to liquidate . In

br to ride the distress , a company must work on its weak areas and try to keep away from costs and investments that would do nothing but add to its debt . Also a company must always be cautious that its investors and shareholders do not lose faith in its credibility . [the client 's ]

WestJet Airlines Ltd , is one such firm that is in financial distress . It is a low cost Canadian air carrier , founded in 1996 by Clive Beddoe Mark Hill , Tim Morgan and Donald Bell . The carrier was modelled after the Southwest Airlines . [WestJet 's founder stepping down as CEO . July 25 , 2007 .

.1 . Retrieved March 16 , 2009]

The current economic crisis and the difficult pricing environment has brought about a significant drop in air traffic . The Calgary-based airline logged a 34 dip in Q4 earnings in February this year , to 41-million

Besides the thinning of the air traffic , another major reason for the dip is...