WestJet flew 1.6M passengers in May
A pilot taxis a Westjet Boeing 737-700 in Richmond, February 3, 2014. THE CANADIAN PRESS/Darryl Dyck
WestJet signalled that passenger demand remains strong heading into the summer season as the airline flew 1.6 million passengers in May, a 5.1 per cent increase from the same time last year.
The Calgary-based airline said its passenger traffic in the seasonally slower month increased 4.8 per cent from last year, while capacity grew 4.1 per cent.
As a result, its planes were fuller with the load factor increasing to 79 per cent, up from 78.5 per cent in May of 2013.
"We are very pleased with our continued strong year-over-year traffic growth as a record number of guests in May chose to fly with WestJet," president and CEO Gregg Saretsky said in a news release on Wednesday.
WestJet has launched its regional discount service Encore and has said it could launch an international service in the coming years.
In May, WestJet Airlines Ltd. (TSX:WJA) posted first-quarter net earnings of $89.3 million, or 69 cents per diluted share, down two per cent from the same quarter last year.
Chris Murray of AltaCorp Capital said the good offseason performance, in which traffic numbers beat his forecasts, sets up the airline for a strong summer.
"We expect the company to continue to experience strong demand in all segments of the business, while input costs and the Canadian dollar appear to have stabilized which is supportive of continued earnings growth," he wrote in a report.
Analyst David Tyerman of Canaccord Genuity said the slowing capacity growth from 9.1 per cent last May could help WestJet to generate a 13.2 per cent average annual earnings per share growth from 2014 to 2016.
He said the heavy capacity growth of more than nine per cent in the last 12 months has made it difficult for the carrier to recover higher costs. But the significantly slower capacity growth could make it easier for WestJet to increase prices to offset higher costs, he noted.
Cameron Doerksen of National Bank Financial said his weekly tracking of fares indicates that they continue to increase heading into the summer travel season.
On the Toronto Stock Exchange, WestJet's shares gained 32 cents, or 1.29 per cent, at $25.22 in Wednesday morning trading.
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