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WestJet earnings drop 46 percent; says worst behind it

04/11/09

VANCOUVER, British Columbia (Reuters) - WestJet Airlines Ltd posted a slightly weaker than expected 46 percent decrease in third-quarter earnings on Wednesday, but Canada's second biggest carrier said there are signs the brutal air travel slowdown is behind it.

In the past six to eight weeks, there are indications that declines in revenue per available seat mile, an important industry benchmark that measures how much money is made from each passenger, has "leveled off", the no-frills airline said.

"While it is still too early to predict the strength or speed of a potential recovery, we feel optimistic about the future and the continued success of our airline," WestJet Chief Executive Sean Durfy said in a statement.

Shares of WestJet, which competes domestically with Air Canada , were down 1 Canadian cent at C$11.08 on the Toronto Stock Exchange.

Earlier, WestJet reported earnings of C$31.4 million ($29.6 million), or 24 Canadian cents a share, for the three months to September 30, down from a profit of C$57.9 million, or 45 Canadian cents a share, on weak demand and as airlines slashed prices to fill seats.

Revenue at the airline, which is one of the few profitable carriers in the world, fell 16.4 percent to C$600.6 million.

Analysts, on average, had expected it to report earnings of 27 Canadian cents a share on revenue of C$603 million, according to Thomson Reuters I/B/E/S.

Revenue per available seat mile, RASM, fell 15.5 percent in the third quarter, in line with company forecasts of a 15 percent to 17 percent decline.

WestJet expects its capacity to increase between 2 percent and 3 percent in the fourth quarter, notably to cross-border and other international destinations. The airline flies to 60 cities in North America and the Caribbean.

WestJet said it will take delivery of five aircraft in the fourth quarter, boosting its fleet to 86 by year-end.

Load factor, the percentage of available seats that are filled with paying passengers, fell 1.7 percentage points to 79.7 percent in October, it said in a separate statement.

($1=$1.06 Canadian)

(Reporting by Nicole Mordant and Scott Anderson; editing by Rob Wilson)

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