By Scott Haggett
CALGARY (Reuters) - WestJet Airlines Ltd.
The Calgary, Alberta-based firm, Canada's No. 2 airline, earned C$12.9 million ($11.4 million), or 10 Canadian cents a share, compared with a loss of C$9.6 million, or 8 Canadian cents per share in the first quarter of last year.
It was the highest first-quarter profit in the company's history and came as the airline flew more people farther on fuller planes and managed its expenses, particularly fuel costs which soared 22 percent year-over-year as oil prices climbed.
"It was a very strong quarter," said Cameron Doerksen, analyst with Versant Partners in Montreal. "It may end up being the best profitability of any airline in North America."
The profit surpassed the average earnings per share estimate of 4 Canadian cents, from 14 analysts polled by Reuters Estimates.
Shares in the airline rose 19 Canadian cents to C$11.53 on the Toronto Stock Exchange by midafternoon.
WestJet, which competes nationally with larger rival Air Canada, said its yield, a measure of revenue per passenger mile, climbed 11 percent to 16.8 Canadian cents as revenue per available seat mile rose nearly 20 percent and costs per available seat mile rose 7.8 percent to 12.5 Canadian cents.
The company, traditionally strong in Canada's western provinces, has added flights to Hawaii and southern U.S. states and is increasing its footprint in Eastern Canada.
WestJet raised capacity 10 percent from the year-earlier quarter to 2.63 billion available seat miles and revenue passenger miles climbed 19 percent to 2.3 billion.
The load factor, the percentage of seats on a flight purchased by customers, rose 5.8 percentage points over the first-quarter of 2005, to 79.4 percent. The company credited the rising load factor to a new advertising campaign.
"For the past three quarters we have simultaneously increased yield, load factors in the face of increased capacity," Clive Beddoe, WestJet's chief executive, said on a conference call.
"This has also been achieved in the face of increased capacity in the market generally which clearly demonstrates that the demand for air transportation remains strong and growing."
WestJet's profit came despite a 22 percent jump in the cost of fuel, a rise the company has managed by replacing a fleet of aging aircraft with new, fuel efficient Boeing 737 planes.
With its fleet now completely composed of newer jets, WestJet's fuel costs climbed only 12 percent over the year-earlier quarter measured by available seat mile.
Older 737-200 series aircraft have been replaced by new 737-600, 700 and 800 series planes. The company has a fleet of 55 jets, with eight more to be added this year. At an average age of 2.1 years, WestJet said it has the newest fleet of aircraft among North American carriers.
The firm is also said it now has a shortlist of five candidates to replace Alexander Campbell as chief financial officer when he leaves in June. A replacement will be named within a month, Beddoe said.
WestJet's revenue rose to C$387.6 million, from C$294.6 million a year earlier.
WestJet said it expects further growth in Eastern Canada, transborder flights and the business-traveler market.
($1=$1.13 Canadian)
