WestJet and Air Canada report double-digit revenue growth; both profitable and operating level


In the Canadian market, shares in Jazz Air, Air Canada-B and WestJet were all weaker, with reductions of 6.3%, 4.4% and 0.1% respectively. Air Canada and WestJet reported their financial results for the three and six months ended 30-Jun-2010, with Jazz Air reporting its results earlier in the weak.

  • Shares in Jazz Air, Air Canada-B, and WestJet weakened in the Canadian market.
  • WestJet and Air Canada reported double-digit revenue growth in the second quarter of 2010.
  • WestJet's yields continued to decline, while Air Canada's yields slightly improved.
  • US airline stocks were generally weaker due to higher unemployment claims.
  • Republic Airways' shares gained after an upgrade in rating and price target.
  • Allegiant reported a double-digit increase in total RASM but experienced a decline in share price.

WestJet and Air Canada reported double-digit revenue growth in the three months to Jun-2010, of 14.2% (to USD602 million) and 12.7% (to USD2,582 million), respectively, with both carriers also profitable at the operating level. WestJet reported an operating profit of USD39.5 million (+9.1%) and a net profit of USD20.7 million (+129.7%), while Air Canada reported a larger operating profit of USD73.8 million (compared with a loss of USD111.1 million in the previous corresponding period), but remained unprofitable at the net level, with a USD199.7 million net loss, compared with a profit of USD152.4 million in the previous corresponding period.

WestJet yields weaker; Air Canada's stronger

Meanwhile, WestJet's yields continued to be pressured, falling 1.1% to USD 15.74 cents in the period, while Air Canada's yields improved slightly, gaining 3.3% to USD 17.61 cents. Revenue per ASM at WestJet increased 4.0% (to USD12.59 cents), while cost per ASM also increased, by 4.4% (to USD 11.76 cents). Air Canada's unit costs, while 37% higher than WestJet's at USD 16.13 cents, declined 0.9% in the period. Passenger and operating RASM at Air Canada was also higher, increased 6.6% and 7.0% to USD 14.56 and USD 16.62 cents, respectively.

US airline stocks were generally weaker on Thursday, as the wider market declined after a report revealed higher unemployment claims in the week ended 31-Jul-2010.

Republic shares upgraded

Republic Airways gained 7.0%, continuing its upward trend, after Avondale Partners upgraded its rating of the carrier from 'Market Underperform' to 'Market Perform'. The analysts also raised its price target for Republic's shares from USD2 to USD7.

Double digit RASM improvement for Allegiant

Allegiant shares declined 4.4% yesterday, as the LCC reported a 14% increase in total RASM in Jul-2010, and a 16% increase in system passenger numbers (to 629,689). Load factors slipped 1.4 ppts to 86.3% in the period.

Hawaiian Airlines pax and load factors improve in Jul-2010

Also reporting traffic yesterday was Hawaiian Airlines (shares down 1.9%), which reported improvements in both passenger numbers (+4.4% to 805,925) and load factors (+1.5 ppts to 86.7%) in the month.

North & South America selected airlines daily share price movements (% change): 05-Aug-2010

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