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UPDATE 1-WestJet says holidays, cancellations to hurt profit
May 7, 2013 / 11:31 AM / 5 years ago

UPDATE 1-WestJet says holidays, cancellations to hurt profit

* Sees revenue per available seat mile to decline in Q2

* Says will buy 10 Boeing 737-800s, sell 10 737-700s

* Defers delivery of 5 737-700s to 2016 and 2017

* First-quarter earnings/share C$0.68 vs est C$0.63

* Revenue up 9 pct to C$967.2 mln vs est C$972.03 mln

May 7 (Reuters) - WestJet Airlines Ltd, Canada’s second-largest airline, said it expects revenue per available seat mile (RASM) to decline in the second quarter, hurt by the timing of the Easter and Passover holidays and cancellation of some business by travel agency Thomas Cook.

RASM is a measure of airlines’ efficiency. The higher the RASM, the more profitable an airline. WestJet’s RASM rose 2.4 percent in the quarter ended March 31.

WestJet said it flew emptier planes in April.

The company also said the loss of a one-time benefit from Air Canada’s labor uncertainty will also hurt profitability in the quarter ending June.

WestJet will sell 10 Boeing 737-700 aircraft to an undisclosed third-party in 2014 and 2015, and will buy 10 Boeing 737-800 aircraft. The airline owns 39 Boeing 737-700s and four 737-800s.

The company also said on Tuesday it deferred the delivery of five Boeing 737-700 aircraft from 2014 and 2015 to 2016 and 2017.

WestJet reported a 33.3 percent rise in first-quarter profit, beating analysts’ estimates, as it flew fuller planes.

Net earnings rose to C$91.1 million ($90.3 million), or 68 Canadian cents per share, from C$68.3 million, or 49 Canadian cents per share, a year earlier.

Revenue rose 8.6 percent to C$967.2 million.

Analysts on average expected earnings of 63 Canadian cents per share on revenue of C$972.3 million, according to Thomson Reuters I/B/E/S.

WestJet’s load factor - the percentage of available seats filled with paying customers - rose to 84.3 percent from 83 percent a year ago. Costs per available seat mile rose 0.3 percent.

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