* Sees drop in revenue per available seat mile
* Says May load factor slides to 74.1 percent
* Shares off 8 percent at C$10.94
VANCOUVER, British Columbia, June 3 (Reuters) - WestJet Airlines Ltd (WJA.TO) warned on Wednesday about a "difficult" second quarter as ongoing economic weakness put a damper on air travel.
President and Chief Executive Sean Durfy said the airline's revenue per available seat mile (RASM) -- a key measure to compare costs across carriers -- is showing "significant declines" in the second quarter, with an expected drop of 16 percent to 18 percent year over year.
"A continued weakened economy and aggressive pricing are leading to reduced fare levels, making it a difficult quarter," Durfy said in a statement.
Shares in WestJet, Canada's No.2 airline, fell as much as 9 percent after the announcement, although one analyst said the forecast was just a short-term hiccup.
By mid-morning the shares were down C$1, or 8 percent, at C$10.94 on the Toronto Stock Exchange.
"While the second-quarter results will undoubtedly be weaker than previously expected, we believe that investors will look beyond the near-term revenue challenges facing the Canadian airlines," Versant Partners analyst Cameron Doerksen said.
"Indeed, we view an investment in WestJet as a good way to play an economic recovery."
Doerksen did, however, lower his target price on the airline's shares to C$15 from C$17.
WestJet, a no-frills carrier, is currently one of the few profitable airlines in North America.
"While these challenges are comparable with what the North American airline industry is experiencing, we believe we are better positioned than most to return to stronger RASM results when the economy begins to rebound," Durfy said.
WestJet also said its planes flew less full last month as its seat capacity rose and the number of paying passengers fell.
In May, WestJet's load factor, a measure of how well it filled its planes, dropped 5.4 percentage points to 74.1 percent from 79.5 percent in May 2008.
Traffic declined 5.8 percent year-over-year to 1.06 billion revenue passenger miles while the airline's seat capacity, measured in available seat miles, rose 1.2 percent to 1.4 billion over the same period.
$1=$1.09 Canadian Reporting by Nicole Mordant; editing by Rob Wilson