Global Airport News

WestJet Airlines posted a big jump in quarterly profit on Thursday, but said uncertainty in the Canadian economy meant it would focus on boosting capacity to destinations outside of the country.

Canada's second-biggest airline said it earned CAD$21 million (USD$20.8 million) in the second quarter, up from CAD$9.2 million in the same period last year.

Stripping out one-time items, the company said profit rose to CAD$23.4 million from CAD$9.2 million.

WestJet said its revenue per available seat mile (RASM) rose for the first time in eight quarters, up 4 percent.

Cameron Doerksen, an analyst at Versant Partners in Montreal, said that was positive for the airline, but that he had expected a 5.5 percent increase in RASM for the quarter.

"WestJet doesn't break out its domestic versus non-domestic numbers… but clearly on the international, they've added a lot of capacity, and because they are new routes, they take a while to mature and they tend to be lower priced and so, I think, that had a bit of a drag on their unit revenue."

Chris Murray, an analyst at PI Financial, said he had expected a 6.4 percent increase in WestJet's RASM.

He pointed to Air Canada, which also released its results on Thursday, and had a 6 percent RASM, with its Canada-only number up 7 percent.

"The majority of WestJet's traffic is still in Canada," he said. "Now, don't get me wrong, but I would have thought they would have done a little bit better."

WestJet said it expects its per-unit revenue to be positive again in the current quarter.

The airline expects to increase capacity 11 percent to 12 percent in the third quarter, with full-year capacity seen increasing 9 percent to 10 percent.

WestJet cut second-quarter domestic capacity, while boosting capacity on flights to southern markets. It said the bulk of the new capacity it adds this year will also be on flights to foreign destinations, and that it needs to see more of a rebound in the Canadian economy before it adds new domestic capacity.

"We are seeing continued strengthening in the Canadian domestic market but it's a slow recovery," Gregg Saretsky, WestJet's chief executive said. "It hasn't been a fast rebound."

Citing the recent downward revision of Canadian GDP growth estimates, WestJet said it will defer delivery from Boeing of one plane to 2017 from 2011 and two other planes to 2017 from 2012. The Calgary-based carrier will take delivery of six planes in 2011 and five planes in 2012.