June 4, 2008 / 9:08 PM / 10 years ago

UPDATE 1-Air Canada loads rise in May, WestJet down

(Recasts with Air Canada results, details, stock close)

CALGARY, Alberta, June 4 (Reuters) - Air Canada ACa.TO flew higher passenger loads in May as strong demand continued, while its main rival, WestJet Airlines (WJA.TO), saw loads fall as it added new planes, figures released on Wednesday show.

Air Canada said the load factor on its mainline system, a measure of how much available space is sold to passengers, rose to a record 84.3 percent last month, up from 83.8 percent in May 2007.

The gains show Canada’s air travel market remained robust last month, even as U.S. airlines struggled to cope with high fuel costs and a faltering economy.

Indeed, on Wednesday United Airlines parent UAL Corp UAUA.O said it would cut up to 1,600 jobs and retire 100 older aircraft because of fuel costs.

To be sure, Air Canada and WestJet both added fuel surcharges to ticket prices last month to recoup costs as oil rose above $120 a barrel.

Air Canada’s record load factor came even as it added capacity. Available seat miles on its mainline system increased 4.7 percent to 4.69 billion from 4.48 billion in May 2007.

The carrier’s combined operations, which include results from its Jazz Air JAZ_u.TO regional unit, posted a load factor of 83.2 percent in May, up 0.3 percentage points.

Combined capacity rose 4 percent to 5.17 billion available seat miles while revenue passenger miles climbed 4.5 percent to 4.31 billion.

Jazz’s load factor fell 2.1 percentage points in May to 72.4 percent. The regional airlines capacity fell 2.6 percent, to 482 million available seat miles, while traffic fell 5.4 percent to 349 million revenue passenger miles.


WestJet said on Wednesday there were more empty seats in its planes in May as it put more aircraft into service, though traffic rose.

Canada’s No. 2 airline said, on average, its planes flew 79.5 percent full, down from 80 percent in May 2007.

It was the second-straight month the carrier has posted a drop in its load factor. April’s fall came after a string of 15 straight monthly gains for the closely watched indicator.

The drop came as the rapidly growing airline added planes to fly to new routes and handle increasing demand for air travel. WestJet’s capacity rose 20.1 percent from May 2007 to 1.42 billion seat miles from 1.18 billion.

Revenue passenger miles, which measure demand, rose 19.3 percent to 1.13 billion from 946 million. The company said that meant 100,000 more passengers flew on the airline last month than in the year-earlier period.

WestJet shares fell 1 Canadian cent to C$15.15 on the Toronto Stock Exchange while Air Canada’s class A shares rose 22 Canadian cents to C$8.90. ($1=$1.02 Canadian) (Reporting by Scott Haggett; editing by Rob Wilson)

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