Tuesday, November 25th4.6°C
23286
23934

Air Canada, WestJet say added capacity being filled by growing passenger traffic

Canada's two main airlines both credit strong passenger traffic for helping them maintain healthy load factors in January.

In fact, Air Canada (TSX:AC.B) reported a record load factor of 80.0 per cent in January — up from 79.4 per cent in January 212 — as a 3.7 per cent increase in revenue passenger miles more than offset a 3.0 per cent increase in capacity, or available seat miles.

"Air Canada generated greater traffic for the month of January in all markets the airline serves . . . led by increases in traffic in Latin American, Caribbean and U.S. transborder markets," president and CEO Calin Rovinescu said.

WestJet, meanwhile, reported a load factor of 80.9 per cent, unchanged from January 2012 as passenger demand grew at the same pace as the airline added capacity.

The airline (TSX:WJA) said it flew 1.6 million passengers in the month, up 8.8 per cent or 129,000 from the same month last year.

Traffic measured in revenue passenger miles grew by 8.4 per cent, while capacity increased 8.3 per cent.

"We have had a great start to the year by tying our load factor record for January, as we saw strong traffic growth and welcomed more guests into our growing network," WestJet president and CEO Gregg Saretsky said.

WestJet told analysts Tuesday that it increased fares by two per cent last week in response to the falling Canadian dollar, a move that was followed by Air Canada and other airlines.

Air Canada reportedly had tried to increase fares before, but they didn't stick because WestJet, its main domestic rival, refused to match the increases.

The airlines are trying to adjust to the impact from the lower loonie on their costs. Saretsky said higher fares are a possibility as well as increased ancillary fees, including possibly a charge for a passenger's first checked bag.

Much of WestJet's increased capacity came from the expansion of its Encore regional service. The airline said 50 to 60 per cent of those passengers connect to its regular flights.

Industry analysts said the traffic results were stronger than expected and provided evidence of healthy demand.

Analyst Walter Spracklin of RBC Capital Markets said the new capacity has been "easily absorbed by robust demand."

He said the data also confirms demand is strong enough to support further fare increases.

Analyst Cameron Doerksen of National Bank Financial said the market is "promising" but he is concerned about the ability to raise fares on sun destination routes where WestJet and Air Canada Rouge are adding lots of seats.

"We suspect that fare increases may become more of a challenge especially for some sun destination markets where industry capacity looks to be increasing materially this year," he wrote in a report.

The Canadian Press


Read more Business News

22970


Recent Trending




Today's Market
S&P TSX15073.65+58.24
S&P CDNX780.64-6.86
DJIA17814.94-2.96
Nasdaq4758.252+3.36
S&P 5002067.03-2.38
CDN Dollar0.8883-0.0001
Gold1200.60+4.90
Oil73.88-1.90
Lumber328.30-2.70
Natural Gas4.286+0.135

 
Okanagan Companies
Pacific Safety0.16-0.005
Knighthawk0.01-0.005
QHR Technologies Inc1.32+0.04
Cantex0.040.00
Anavex Life Sciences0.175-0.005
Metalex Ventures0.030.00
Russel Metals32.14+0.65
Copper Mountain Mining2.15-0.02
Colorado Resources0.130.00
ReliaBrand Inc0.0134-0.0001
Sunrise Resources Ltd0.045-0.005
Mission Ready Services0.325-0.04

 
23744


22970

FEATURED Property
2129835794 Sutherland Ave
3 bedrooms 2 baths
$629,000
more details
image2
Click here to feature your property
Please wait... loading


The last great Canadian tax shelter

A guide to how flow-through fund limited partnerships can mightily aid your tax planning!The end of the year will raise concerns among many professionals, self-employed persons, business owners and ev...


What I learned in China: Part 2

As per my previous article on my visit to China, we have much to learn about and from their people. It is potentially the largest market on earth with 1.3 billion people in one country but much will d...


Retirement: Health Issues

Our health is really our greatest asset and maintaining our health is of tremendous importance. You want to do what you can to ensure that health issues will not jeopardize the enjoyment of your retir...

_



24158

24158


Member of BC Press Council


22632