November 4, 2014 / 12:37 PM / 4 years ago

CORRECTED-UPDATE 1-WestJet third-quarter profit misses estimates on higher costs

(Corrects revenue passenger miles figure in ninth paragraph to 5.40 billion, not C$5.40 billion)

Nov 4 (Reuters) - WestJet Airlines Ltd, Canada’s No. 2 airline, reported a third-quarter adjusted profit that missed analysts’ average estimate, hurt by higher costs.

The airline is growing beyond its roots as a no-frills domestic carrier, boosting capacity and adding more international flights.

Load factor, the percentage of available seats filled with paying customers, inched up to 83.1 percent in the quarter ended Sept. 30 from 82.8 percent a year earlier.

The Calgary-based company said finance costs rose 33.6 percent to C$14.6 million ($12.8 million) in the quarter and cost per available seat mile rose to C$13.60 from C$13.52.

The company’s quarterly net earnings fell 19.8 percent to C$52.2 million, or 40 Canadian cents per share, dragged down by a pre-tax non-cash charge of C$45.5 million related to the sale of 10 old Boeing 737 aircraft.

Excluding the charge, it earned 66 Canadian cents per share, lower than the average analyst estimate of 68 Canadian cents, according to Thomson Reuters I/B/E/S.

Revenue rose 9.2 percent to C$1.01 billion, matching the average analysts’ estimate.

WestJet announced a new fee for checked bags on Sept. 15, leading to hopes that the charge would significantly boost revenue. But a day later, Chief Executive Gregg Saretsky said the fee would let WestJet lower fares instead.

The company’s revenue passenger miles rose nearly 7 percent to 5.40 billion in the third quarter. Revenue passenger miles is calculated by multiplying the number of revenue-paying passengers by distance traveled.

Revenue per available seat mile, a key measure of an airline’s efficiency, increased 2.6 percent. ($1 = C$1.1391) (Reporting by Allison Martell in Toronto and Anannya Pramanick in Bangalore; Editing by Sriraj Kalluvila and Savio D’Souza)

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