Canadian airlines report record January traffic

MONTREAL - Canadian airlines say they saw record passenger numbers last month, signalling a potential upswing during the busier winter flying season.

WestJet (TSX:WJA), Canada's second-largest airline, said Monday its traffic improved in January with a record load factor of 79.9 per cent, compared to 77.8 per cent in the year-earlier.

Revenue passenger miles, or traffic, increased 11.5 per cent and capacity, measured in available seat miles, grew 8.6 per cent year-over-year.

"We are very happy with this strong start to 2012 and the new record January load factor. Our capacity increases are being nicely absorbed and the healthy demand for air travel has continued into the new year," said WestJet president and CEO Gregg Saretsky.

Calgary-based WestJet recently announced a code sharing agreement with Delta Air Lines, which will help it add to its 75-city network. The airline also plans to add capacity with the arrival of 38 new planes through 2018 and is considering adding a short-haul service.

Montreal-based Air Canada (TSX:AC.B), the country's largest airline also saw a record load factor of 79.1 per cent, up from 78 per cent.

Its system-wide traffic, which includes regional airlines through which Air Canada purchases capacity, increased 3.3 per cent, while capacity grew 1.9 per cent.

"Air Canada generated greater traffic in all markets with system wide growth of 3.3 per cent on a capacity increase of 1.9 per cent through higher utilization of our existing fleet," said Calin Rovinescu, president and chief executive officer.

Air Canada flies to more than 180 destinations on five continents.

Toronto-based Porter Airlines, which offers routes in Eastern Canada and the United States, said its load factor grew four per cent to 55.7 per cent, hitting a record for the month.

January results included 111.6 million available seat miles, up 31 per cent from the year earlier and 62.2 million revenue passenger miles, an increase of 41 per cent.

"It is nice to see 2012 begin with strong growth," said Robert Deluce, president and CEO of Porter Airlines.

"As business travel is typically reduced at the beginning of the calendar year, we are able to supplement our schedule with leisure destinations such as Mont Tremblant and Vermont. These are very popular and help to produce positive numbers."

Cameron Doerksen of National Bank Financial says WestJet's traffic numbers suggest the airline is on pace for an 81.5 per cent load factor and better revenues in the first quarter.

"Solid January operating statistics support our positive view of end market conditions for WestJet," he wrote in a report.

On Wednesday, WestJet is expected to report 19 cents per share in fourth-quarter earnings on $774 million of revenue, according to analysts polled by Thomson Reuters. The company has suggested revenues per seat mile should increase by 5.8 per cent from the third quarter.

Doerksen said Air Canada demonstrated particularly strong January traffic results for the transborder and Pacific market. He added that the airline is on pace to have a 79 per cent load factor during the first quarter.

"We continue to have concerns over the still unresolved labour issues at the company noting that a cooling off period with the pilots union ends on Feb. 14," he wrote in a separate report.

Analysts expected Air Canada will report a 50-cent per share loss in the fourth quarter on $2.7 billion of revenue when it issues earnings on Thursday.

On the Toronto Stock Exchange, Air Canada's shares gained seven cents, or 5.15 per cent, at $1.43 in morning trading. WestJet shares were down six cents at $13.53.

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