WestJet, Air Canada post record load factor in January
Air Canada planes are shown in this undated image. (Andrew Vaughan / THE CANADIAN PRESS)
Published Tuesday, February 5, 2013 5:05PM EST
MONTREAL -- Canada's two largest airlines reported record monthly load factors in January, demonstrating continued momentum as they start what industry observers expect will be a profitable year.
Air Canada (TSX:AC.B) flew with 79.4 per cent of its seats filled across its broad network, up from 79.1 per cent a year ago.
The load factor increased on a 0.3 per cent increase in traffic and a 0.1 per cent drop in capacity. The traffic gains were led by a three-per-cent growth on Atlantic routes and 2.1 per cent gain in Canada.
Latin America and Caribbean traffic was down nearly 10 per cent on a similar reduction in capacity. Transborder capacity growth outpaced traffic, reducing load factor by 0.8 points to 74.5 per cent.
"These results underscore the effectiveness of our disciplined capacity management and award-winning product," stated Air Canada chief executive Calin Rovinescu.
Meanwhile, WestJet Airlines also reported a record monthly load factor as the number of their passengers grew 6.4 per cent to 1.5 million.
The Calgary-based airline said Tuesday that its planes flew 80.9 per cent full in the first month of the year, up one percentage point from 79.9 per cent a year ago.
"Positive momentum continues into 2013 as January marks our seventh consecutive monthly load factor record," stated WestJet president and CEO Gregg Saretsky.
He added that forward bookings remain strong.
Analysts monitor load factor as a measure of how much total fleet capacity is used by an airline to carry passengers.
Traffic, or revenue per passenger mile, increased 7.7 per cent in January on a 6.4 per cent increase in capacity or available seat miles.
WestJet (TSX:WJA) has expanded its offering this winter to sun destinations by adding service to several destinations in the Caribbean and Mexico from Toronto and Calgary.
The airline will report its fourth-quarter and year-end results on Wednesday and is expected to soon announce the schedule for its new regional service, WestJet Encore.
Cameron Doerksen of National Bank Financial said WestJet's traffic results are a clear indication of healthy air travel demand.
"We also believe that WestJet's load factor is benefiting from its charter deal with Thomas Cook," he wrote in a report, adding that strong bookings suggest continued good traffic numbers in the coming months.
Analysts expect WestJet will report 42 cents per share in adjusted profits in the fourth quarter on $856 million of revenues.
Meanwhile, Porter Airlines said its load factor decreased 2.1 percentage points to 53.6 per cent in January on a 0.8 per cent increase in traffic and a 4.7 per cent growth in capacity.
"These results are good for January, which is typically the slowest period of the entire calendar year," said president and CEO Robert Deluce.
He said Porter's new leisure package division is only beginning to increase the number of passengers with trips to ski destinations in Vermont and Quebec among the most popular options.
On the Toronto Stock Exchange, WestJet's shares closed up 72 cents or 3.3 per cent to $22.55 while Air Canada's shares were up two cents to $2.45 in Tuesday trading.