OTTAWA (Reuters) - Air Canada and WestJet Airlines Ltd, Canada’s two largest airlines, flew emptier planes in December as they boosted capacity, while the planes of smaller regional rival Porter Airlines were more crowded in the travel-heavy month.
Air Canada, the country’s biggest carrier, said its December load factor, a measure of how full its planes were, dropped 0.4 percentage points from the year-before month to 80.8 percent.
The drop came as a 7.2 percent rise in traffic, measured in revenue seat miles, was outstripped by a 7.6 percent rise in capacity as the company boosted international flights.
“These strong results ... were achieved as we continued to increase utilization of our existing fleet and deploy capacity to pursues strategic opportunities in international markets,” Calin Rovinescu, Air Canada’s chief executive, said in a statement.
For the fourth quarter, Air Canada said its load factor rose to 78.8 percent, up 0.2 percentage points from the same period in 2009 on an 8 percent rise in traffic, while capacity increased 7.8 percent.
Its shares closed 6 Canadian cents higher at C$3.56 on the Toronto Stock Exchange on Thursday.
Despite its lower load factor in December, WestJet said it still expects final figures will show it had higher revenue per available seat mile (RASM) in the fourth quarter. The revenue that an airline earns from flying one seat one mile is a key industry measure.
“We expect improved RASM in the fourth quarter, which is in line with our previous guidance given in our third-quarter results,” Chief Executive Gregg Saretsky said in a statement.
Calgary-based WestJet said its December load factor, the percentage of available seats filled with paying customers, fell to 80.3 percent from 81.7 percent in December 2009.
Traffic, or revenue passenger miles, increased by 10.9 percent in December, and capacity, or available seat miles, grew 12.9 percent.
For the fourth quarter, the load factor was 0.1 percent higher as traffic increased 13.9 percent and capacity rose 13.8 percent. For the full year, the load factor rose 1.2 percent, traffic was up 12.9 percent and capacity 11.1 percent.
“Investors may have some concern about the lower year-over-year December load factor, but this does not concern us,” National Bank Financial analyst Cameron Doerksen said in a note.
Doerksen said WestJet has been trying to increase yield through higher prices, which typically weigh on load factors. Its 80.3 percent load factor was higher than any other December, excluding 2008 and 2009, when yields were depressed, he wrote.
WestJet shares closed 17 Canadian cents higher at C$14.47 on the Toronto Stock Exchange on Thursday.
Privately owned Porter Airlines, Canada’s No. 3 scheduled carrier, said its load factor increased 12.6 percent in December to 62.4 percent from 49.8 percent in December 2009.
Traffic increased 43 percent and capacity rose 13.9 percent.
Porter, a regional airline which flies out of Toronto’s downtown Billy Bishop Airport, put off a proposed initial public offering of its shares last year due to lack of response.
Reporting by Susan Taylor and Scott Haggett; editing by Peter Galloway