September 6, 2012 / 2:42 PM / 6 years ago

WestJet, Porter see record-high demand in August

(Reuters) - WestJet Airlines Ltd (WJA.TO), Canada’s No. 2 carrier, said on Thursday that code-share and interline pacts with other airlines helped boost demand to a record level in August.

Calgary-based WestJet said its load factor, or the percentage of available seats filled with paying customers, rose to a record high 88.9 percent in August from 83.3 percent a year earlier.

The news helped lift WestJet shares by nearly 2.8 percent to C$17.03 on the TSX on Thursday morning.

Traffic increased 9.2 percent, while capacity, measured in available seat miles, rose just 2.3 percent.

“The demand environment remains strong and we are seeing a growing contribution from our airline code-shares and interline partnerships,” Chief Executive Gregg Saretsky said in a statement.

Under code-share deals, airlines sell space on each other’s flights, which can boost revenue as they can offer more destinations to passengers while controlling costs.

Interline pacts, often a precursor to full code-share deals, allow customers to purchase one ticket for a trip involving multiple airlines.

National Bank Financial analyst Cameron Doerksen said WestJet will likely report a third-quarter load factor well ahead of his forecast of 81.5 percent.

“With the load factor trending well ahead of expectations and fuel costs so far in the quarter largely in-line with our estimate, we believe our Q3 EPS estimate of C$0.43 (versus C$0.28 last year and the consensus of C$0.39) is probably too low,” Doerksen said in a note.

“Clearly WestJet’s August numbers point to a healthy demand environment. Further evidence of a strong end-market environment comes from Porter Airlines.”

Privately held Porter, a small, short-haul airline, said it also set a record in August, with a load factor of 74.5 percent, up from 68.7 percent a year earlier.

Traffic rose 21.4 percent, while capacity rose 12 percent.

“This is the best month we’ve had in nearly six years of operating,” said Chief Executive Robert Deluce.

Year-to-date, Porter’s load factor has climbed to 62.9 percent from 59.1 percent. Traffic is 26 percent higher and capacity is up 18.3 percent.

Traffic data from Canada’s largest airline, Air Canada ACb.TO, was expected later in the day.

Reporting By Susan Taylor, with additional reporting By Sandhya Vijayan in Bangalore; Editing by Akshay Lodaya; and Peter Galloway

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