WestJet plots growth, sees "short-term pain"

* Talking to 70 airlines globally about partnerships

* Southwest still committed to code-share deal

* CEO says company will "survive and thrive"

OTTAWA, May 28 (Reuters) - Analysts should not make too much of WestJet's (WJA.TO) delayed code-share agreement with U.S.-based Southwest Airlines (LUV.N), the chief executive of Canada's No. 2 carrier said on Thursday, as it can quickly strike deals with other airlines to help spark growth.

WestJet has discussed partnerships with 70 airlines globally and is on schedule to launch a new reservation system in the fourth-quarter that will help support such agreements, the company said at an investor conference.

"There's some tremendous opportunities with other great partners that we could implement pretty quickly," Chief Executive Sean Durfy said via webcast.

Southwest remains committed to the code-share deal, but first needs to "get its house in order" in the struggling U.S. travel market, Durfy said.

Afterwards, it can launch the arrangement, which Durfy said could include joint procurement and cargo arrangements, along with provisions for the two airlines to sell seats on each other's flights.

"The U.S. is under a ton of pressure right now, so let's not read too much into this," he said of the delay.

Code-share arrangements are lucrative, particularly for expansion into the rich market for business travel.

The market for connecting passengers is worth about C$2 billion annually, said WestJet, with the United States leading the market size.

The Calgary, Alberta-based airline said in February that it would study a code-share pact Air France-KLM (AIRF.PA) and has an incoming passenger pact with China Airlines (2610.TW).

DIFFICULT ENVIRONMENT

WestJet predicts "short-term pain" over the next two quarters, as it faces a slumping economy, weak demand, jitters over the H1N1 flu virus, and lower pricing on tougher competition.

It is estimated that the global airline industry saw demand tumble 14 percent over the last six to eight months, Durfy said, leaving about 2,200 planes sitting on tarmacs.

There is speculation by some analysts that Canada's biggest carrier, Air Canada (ACa.TO), is again headed for bankruptcy protection because it faces major financial and labor problems.