WestJet

WestJet and New York. Moving in a new direction?

The announcement last week that WestJet had successfully bid for eight slots at New York’s LaGuardia airport, along with its press release that indicated a new focus on “increased business travel in the East”, may signal a new phase in the airline’s development.

Westjet profits down 10.4% but revenue up 13.3%

Following the rest of the industry and bringing the third quarter, North American airline earnings season to a close, WestJet posted CAD39.2 million profit, down 10.4% on a 13.3% uptick in revenues to CAD 775.3 million. However, it missed its consensus target.

The company attributed its results to growth in both yield, up 5.3% to CAD 17.97 cents and revenue per available seat mile (RASM), up 5.9% to CAD 14.39 cents and boasted 3Q2011 was its 26th consecutively profitable quarter. Echoing peers in the US and Canada, the company sees continued strong bookings, adding corporate travellers were growing as companies seek to stretch their dollars.

CEO Greg Saretsky indicated corporations are able to travel more with the same travel spend as last year by booking WestJet. Third quarter corporate revenues grew at a much faster pace on increased RASM and volume.

Air Canada and Porter Airlines report load factor growth in Sep-2011 as WestJet load factors weaken

Air Canada, Canada’s largest carrier, and the much smaller Porter Airlines, reported improved load factors in the summer-winter transitional month of Sep-2011, while the nation’s second largest carrier and largest LCC, WestJet, reported weaker-than-expected load factors. This weakening load factor result occurred despite WestJet offering seat sales to stimulate demand and amid more aggressive growth in the month than at its larger rival. Porter Airlines’ load factor, while improving 12.2 points in the month, remains considerably weaker than its larger competitors.

While WestJet traffic growth was not able to keep pace with expansion in Sep-2011, it is widely expected that the carrier, with its lower operating costs than Air Canada, is better placed to weather potentially reduced travel demand amid an environment of global economic uncertainty. It is also expected that with capacity growth slowing in 4Q2011 and into 2012, and with healthy forward bookings, the load factor weakness in Sep-2011 could be rectified. 

Porter Airlines win surprisingly shuts Air Canada out of downtown Toronto airport slots award

A somewhat surprising awarding of the final 16 slots at Toronto City Island Billy Bishop Airport to incumbent Porter Airlines, which now holds 172 of the 202 available slots at the convenient downtown airport, comes with Porter's decision to once again shelve plans for an initial public offering (IPO) after failing in April 2010 to develop any interest in the CAD120 million (USD116 million) offer. An analysis of the slot issue tells the story of why Porter, which says it is profitable, was awarded the slots. Porter also shelved plans to raise private funding, adding that market conditions were little different than when it originally advanced its first IPO attempt.

WestJet touts success despite fuel increases

WestJet CFO Vito Culmone touted WestJet’s success to investors at last week's Dahlman Rose Transportation conference, saying all metrics were ahead of last year. He reported August posted a record load factor at 83.3% while overall revenue passenger miles rose 7.7% and year-to-date revenue passenger miles (RPMs) were up over 9%. Mr Culmone also echoed peers speaking at the conference that forward bookings remain healthy and its capacity increases continued to be absorbed by the market.

As with is low-cost counterparts south of the border, WestJet is in a growth mode, improving its footprint in Eastern Canada as well as in the trans-border and near international markets. More than half its service is to destinations outside of Canada. That shifts higher in the winter when it increases service to sun destinations and then switches back in summer when about 75% of capacity is in Canada.

Emirates and Lufthansa growing strongly this summer: World's biggest airlines rankings for August

Lufthansa and Emirates are the fastest growing carriers of the global top ten, increasing their capacity (ASKs) by 12.4% and 8.1% year-on-year, respectively. Delta remains the world's leading carrier by this measure, followed by American Airlines and United Airlines. Combined, United-Continental is roughly 3.3% bigger than Delta by systemwide ASKs.