WestJet load factor sank in June
Last Updated: Monday, July 6, 2009 | 1:09 PM ET
The Canadian Press
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A Westjet airline plane lands at Calgary International Airport in Alberta, on June 17, 2008. The airline's load factor, a measure of how full its planes are, dropped in June. (Todd Korol/Reuters News Agency) WestJet Airlines Ltd. says it flew emptier planes in June than the same month a year ago, as the economic downturn continued to exact its toll on the travel industry.
The Calgary-based airline said Monday its June load factor — a measure of how many available seats are filled by passengers — was 72.9 per cent, down from 76.5 per cent in June 2008.
Revenue passenger miles, a measure of passenger traffic, was down 7.1 per cent and available seat miles, or capacity, fell 2.5 per cent.
"We continue to tackle the difficulties of a tough economy," stated Sean Durfy, WestJet's president and chief executive officer.
"Staying true to our fundamentals is extremely important in this challenging time for the airline industry."
The industry has taken a hit in recent months, as cash-strapped consumers rein in their travel spending. The H1N1 flu outbreak, which originated in Mexico, has also kept many passengers away from that popular vacation destination.
WestJet said it is continuing to assess its capacity and where its aircraft are deployed.
It is also looking at ways to reduce costs.
For instance, in mid-June, WestJet bought out the lease of an 800-series aircraft that it took delivery of earlier this year.
"It is important for us to explore every area where we can save, and find the most effective opportunities to deploy capital," said Durfy.
"In the current environment, returns on traditional forms of short-term investments are low. Deploying some of our cash to buy out this eight-year lease allowed us to reduce our aircraft leasing expense while maintaining flexibility in our liquidity through an unencumbered aircraft."
In the first quarter, WestJet's profit fell 29 per cent from the same three months of 2008 to $37.4 million. Revenue was down three per cent to $579.3 million.
At the time, Durfy cautioned that its second quarter results, set to be released in early August, may also take a hit.
WestJet shares were caught up in a broad market sell-off at midday Monday, off about 3.5 per cent to $10.42 on the Toronto Stock Exchange.
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