January 6, 2010 / 10:45 PM / in 8 years

WestJet December loads up, Air Canada dips

* WestJet December load factor a record 81.7 pct

* Maintains fourth-quarter revenue forecast

* Air Canada load factor dips slightly to 81.2 pct

* WestJet stock gains 1 percent; Air Canada down a penny

By Susan Taylor

OTTAWA, Jan 6 (Reuters) - WestJet Airlines WJA.TO, Canada’s No. 2 carrier, reported a record load factor on Wednesday, saying it flew fuller planes in December as it improved call center service after stumbling with a new reservation system.

Air Canada’s ACa.TO load factor slipped a bit during the travel-heavy month, but the country’s dominant airline said it still maintained a strong showing as its overall capacity increased.

WestJet said its load factor, or the percentage of available seats filled with paying passengers, rose to 81.7 percent from 80.9 percent a yea earlier.

Traffic, measured by revenue passenger miles, increased 8.1 percent year-over-year, and capacity, or available seat miles, rose by 7 percent.

WestJet shares rose 1 percent, or 12 Canadian cents, to C$13.38 on the Toronto Stock Exchange.

Versant Partners analyst Cameron Doerksen raised his stock target to C$16 from C$14 after WestJet’s numbers were announced, saying he expects traffic and unit revenue improvements through 2010.

For its part, Air Canada’s December load factor was 81.2 percent on a consolidated basis, down a hair from 81.7 percent a year earlier. The figures include results from regional affiliate Jazz Air LP JAZ_u.TO.

Capacity increased 4 percent to 4.7 billion available seat miles, and traffic rose 3.4 percent to 3.86 billion revenue passenger miles.

The results reflected the airline’s attention to managing capacity during the lengthy industry downturn, Chief Executive Calin Rovinescu said in a statement.

Air Canada’s A-series shares slipped 1 Canadian cent to C$1.30. The B-series stock rose 4 cents to C$1.30.

WESTJET GLITCHES

WestJet, which launched its new Sabre reservation system in mid-October, warned last month that transition problems would hurt fourth-quarter revenue. The airline maintained that forecast on Wednesday, saying it still sees a decline in revenue per seat mile of 11 percent to 13 percent from the year-prior quarter.

“We have made considerable progress in our call center service levels since our reservation system cutover in October, and we are on our way to fully restoring our high-quality service,” said Chief Executive Sean Durfy.

“Despite record loads, winter storms and increased security measures over the busy holiday period, we completed 98.3 percent of our scheduled flights in December.”

Canada announced plans on Tuesday to introduce full-body scanners at all its major international airports as it tightens security for flights to the United States after a failed attack last month on a U.S.-bound plane. [ID:nN0567863]

The government also said it was aware that the more intrusive security measures could hurt the airline industry and was talking with industry officials about the financial impact of the measures.

“The security issues that flared up over the holidays likely had an impact on WestJet as flight delays, increased checked bags, and the waiving of bag fees either increased costs or lowered potential revenue,” Versant’s Doerksen said in a note.

“We suspect that there will be some negative impact on airlines as long as the increased security measures remain an inconvenience for passengers. If the measures are not eased, there will undoubtedly be some permanent disincentive for Canadians to travel to the U.S.”

$1=$1.03 Canadian Additional reporting by Jeffrey Jones; editing by Rob Wilson

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