October 3, 2008 / 4:13 PM / in 9 years

WestJet shares fall as traffic figures weaken

CALGARY, Alberta, Oct 3 (Reuters) - Shares of WestJet Airlines Ltd WJA.TO sank to their lowest level in nearly two years on Friday after the carrier reported its planes flew smaller passenger loads in September as the economy weakened and its capacity increased.

WestJet, Canada’s second-largest airline, reported a load factor, or percentage of available seats filled, of 75.5 percent last month, down from a year-earlier 78.7 percent.

The dip came as capacity, measured by available seat miles, rose 15.8 percent to 1.417 billion, and revenue passenger miles climbed 11 percent to 1.069 billion.

WestJet shares, fell 40 Canadian cents, or 3.5 percent, to C$11.05 on the Toronto Stock Exchange.

On Wednesday, Chief Executive Sean Durfy told Reuters that he had seen bookings for October dip during the last 10 days and blamed worries about the U.S. credit crisis enveloping all financial and commodity markets.

However, Durfy said travel demand appeared to be staying strong for November and December, and he had no plans to adjust WestJet’s capacity additions for 2008 and 2009.

Versant Partners analyst Cameron Doerksen said he remains positive on the stock over the long term as the carrier’s low costs and strong balance sheet likely spell more gains in market share.

But he warned that the market uncertainty means further downside in the short term.

Doerksen cut his 12-month target price to C$14.50 from C$19, but maintained a “buy” recommendation.

“Given the heightened degree of economic uncertainty facing the country, we believe that demand conditions for WestJet in upcoming quarters are going to be challenging,” Doerksen wrote in a note to clients.

$1=$1.08 Canadian Reporting by Jeffrey Jones; editing by Rob Wilson

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