air canada, westjet traffic rise in august
Air Canada, WestJet traffic rise in August September 7, 2004 4:22pm ET (Reuters)
MONTREAL, Sept 7 (Reuters) - Traffic rebounded at Canada's top two airlines in August, but while Air Canada filled a greater percentage of seats than a year earlier, the load factor at rival WestJet Airlines Ltd. declined, the companies said on Tuesday.
Air Canada, which plans to emerge from bankruptcy protection at the end of the month, said it flew 9.8 percent more revenue passenger miles in August than a year earlier.
Capacity rose 6.5 percent, resulting in a record load factor -- a closely watched indicator that measures the percentage of seats filled on planes -- of 83.2 percent.
Air Canada's load factor for August 2003 was 80.6 percent.
At Calgary's fast-expanding WestJet, revenue passenger miles rose 21.8 percent in August, while capacity increased 26.6 percent.
WestJet's load factor slipped to 79.8 percent from 82.9 percent a year earlier.
High fuel prices and fierce price discounting hurt the bottom line of both airlines this year, but Research Capital analyst Jacques Kavafian said WestJet has retained a substantial cost advantage over Air Canada, the former state-owned carrier.
"WestJet's seat-mile cost is estimated at 11.1 Canadian cents per available seat-mile, while Air Canada's is estimated at 14.5 Canadian cents," wrote Kavafian as he initiated coverage of WestJet on Tuesday.
Kavafian has a "buy" recommendation on WestJet shares as he believes the stock price will rebound by more than 50 percent within the next 12 months.
WestJet's expansion plans include starting up flights to U.S. cities this fall and broadening its incursion into Air Canada's busy eastern Canadian market.
Air Canada, which carries two-thirds of Canada's domestic traffic, has been reducing its fleet and simplifying its fare structure in a bid to stop its losses.
In the latest step, Air Canada dissolved its Calgary-based discount unit Zip on Tuesday and will return Zip's 12 Boeing 737 jets to lessors before year's end.
WestJet's share price fell 36 Canadian cents to C$13.41 on the Toronto Stock Exchange on Tuesday. The stock has dropped 36 percent over the past nine months.
