Source: Reuters Author: Susan Taylor 09/03/2009
Subject Concerned: Opinion Airlines
Canada's No. 2 airline, WestJet Airlines Ltd, said on Sep. 3 that its load factor and traffic statistics weakened in August as the "deep recession" continued to squeeze demand for air travel.
The discount carrier said its load factor, or the percentage of available seats filled with paying passengers, fell to 84.5 percent in August from 88.4 percent in the same month last year.
Traffic, as measured in revenue passenger miles, dropped 4.7 percent to 1.32 billion, as total capacity, measured in available seat miles, declined 0.4 percent to 1.57 billion.
"While we are encouraged by the talk of an economic upturn, and are not seeing further declines in demand, we remain cautious about a recovery," WestJet Chief Executive Sean Durfy said in a statement.
"WestJet's third-quarter revenue per available seat mile is tracking to an anticipated decline of 16 to 18 percent compared to the third quarter of 2008."
CIBC World Markets analyst Chris Murray said the 4.7 percent traffic decline bettered his estimate of a 6.6 percent fall and the 84.5 percent load factor surpassed his expectation of 82.9 percent. Capacity cuts matched his forecast.
"August 2008 was an exceptionally strong month to have to compare against and we remain cautiously optimistic given recent economic data points that travel demand is beginning to firm, which should lead to higher earnings into 2010," he wrote in a note.
Westjet shares fell 1.6 percent, or 19 Canadian cents, to C$11.70 on the Toronto Stock Exchange on the morning of Spe. 3. So far this year, the stock has lost about 14 percent of its value.