Air Canada and WestJet report slightly weaker load factor in Jun-2011

Air Canada and WestJet Airlines, Canada's two largest carriers, both reported slight load factor reductions in the shoulder month of Jun-2011, but expressed optimism about a pick-up in demand during the peak summer travel months of Jul-2011 and Aug-2011. The much smaller Porter Airlines, meanwhile, reported 12.4 ppt load factor increase in the month, although its load factors remain more than 10 ppts weaker than its larger competitors.

Air Canada and WestJet passenger load factor growth (ppts): Jun-2010 to Jun-2011

Looking at the next two months, forward bookings at the Canadian carriers appears strong, with a favourable pricing environment, boding well for positive yield, traffic and financial results in the third quarter. Meanwhile, both Air Canada and WestJet are scheduled to report 2Q2011 financial results on 04-Aug-2011. Air Canada, upon the release of its 1Q2011 financial results, stated it expects 1H2011 EBITDAR to increase by up to 5% year-on-year. WestJet, meanwhile, stated it expected continued strong year-on-year RASM growth in 2Q2011.  

WestJet comfortable with yield-growth-load factor balance

Commenting on its load factor result for Jun-2011, WestJet President and CEO Gregg Saretsky stated that “although loads were slightly down for June, a shoulder-season month, we are comfortable with the balance achieved between yield, growth and our load factor”.  He continued: “We are pleased with the advanced bookings for July and August, and the pricing environment continues to be strong. With the school year winding down, families are gearing up for summer vacations”.

WestJet Jun-2011 traffic highlights

The carrier’s load factors, which very significantly both on a month-on-month and year-on-year basis, have been weaker on a month-on-month basis for the past three consecutive months.

WestJet Passenger Load Factor (2009 to 2011)

WestJet handled an additional 68,000 passengers in Jun-2011 compared to Jun-2011. Traffic (RPMs) increased 5.8% on a 9.2% increase in capacity (ASMs), resulting in the 2.5 ppt load factor decline to 75.7%.  WestJet’s monthly capacity growth, as is generally the case, was larger than Air Canada’s capacity additions in the month.

Air Canada reports capacity growth at higher end of estimates

Air Canada, meanwhile, reported a load factor that was 8.5 ppts stronger than at WestJet, as has been the case for the past two months. Over the past 12 months, Air Canada has reported stronger load factors than WestJet in nine months, with WestJet’s load factors stronger in four of the past 13 months. 

Air Canada and WestJet passenger load factor: Jun-2010 to Jun-2011

Air Canada usually reports its strongest load factors in Jul-2011 and Aug-2011.

Air Canada Passenger Load Factor (2009 to 2011)

Air Canada’s system load factor stood at 84.2%, a 0.5 ppt year-on-year reduction. System traffic (ASMs) increased 2.5% on a system-wide (ASMs) capacity increase of 3.0%. In 2Q2011, the carrier reported a capacity (ASMs) increase of 6.4%, at the higher end of the carrier’s capacity growth estimate of +5,5% to +6.5% for the quarter.

Air Canada 2Q2011 and FY2011 outlook

"For the month of June, Air Canada reported a system load factor of 84.2%. Led by an 8.4% traffic increase in Latin America and Sun destination markets, we generated system wide traffic growth of 2.5% on a capacity increase of 3% through higher utilisation of our existing fleet," said President and CEO Calin Rovinescu. "Following on the record load factor we reported for June 2010, these solid results highlight Air Canada's ongoing focus on operating the airline in a disciplined and efficient manner with respect to capacity and asset deployment”. 

Like WestJet, Air Canada does not report monthly traffic numbers, although the carrier stated it handled more than 122,000 passengers on 30-Jun-2011, a record for a single day as it heads into the peak summer travel season.  

Air Canada Jun-2011 traffic highlights

Both Air Canada and WestJet have reported traffic (RPMs) and capacity (ASMs) growth over the past 24 months, although traffic growth at both carriers has slowed from double digit growth 12 months ago to single-digit growth in the past couple of months.   

Air Canada and WestJet RPM growth: Jun-2010 to Jun-2011

Air Canada and WestJet ASM growth: Jun-2010 to Jun-2011

WestJet Available Seat Miles (2009 to 2011)

WestJet Revenue Passenger Miles (2009 to 2011)

Air Canada Revenue Passenger Miles (2009 to 2011)

Air Canada Available Seat Miles (2009 to 2011)

Large load factor improvement for Porter Airlines

The much smaller Porter Airlines reported a 12.4 ppt load factor improvement to 64.6%, although this load factor is considerably weaker than at WestJet and Air Canada. Load factor on the high-frequency Toronto City-Montreal route also increased 11.7 ppts year-over-year.

Passenger numbers, capacity (ASMs) and traffic (RPMs) set new records for the second consecutive month. More than 203,000 passengers travelled in Jun-2011 compared to 136,000 in Jun-2010. The carrier reported a 19.5% capacity (ASKs) icnreaes in the month, with traffic (RPKs) growth of 47.9%. Like Air Canada, Porter Airlines reported its single bsiest passenger day on 30-Jun-2011, prior to the Canada Day and Independence Day long weekends.

“It’s rewarding for everyone at Porter to see growth like this as we attract more customers by delivering a service-oriented passenger experience, said Robert Deluce, president and CEO of Porter Airlines.  

Porter Airlines Jun-2011 traffic highlights

Porter, based at Billy Bishop Toronto City Airport, lost its monopoly at the airport when Air Canada relaunched its service from that airport in May-2011. The carrier operates short-haul flights in eastern Canada and into the US.

Toronto City Centre Airport capacity (seats per week, to/from) by carrier (04-Jul-2011 to 10-Jul-2011)

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