WestJet Airlines Ltd. reported a 63-per-cent drop in first-quarter profit Tuesday, citing travellers' sensitivity to prices, but the low-cost carrier said there are signs it is on track for a stronger second quarter.
WestJet, Canada's second-biggest airline, earned $13.8-million, or 10 cents a share, in the quarter, down from $37.4-million, or 29 cents, a year earlier.
Excluding a charge related to the resignation of former chief executive officer Sean Durfy, the company earned $17.5-million, or 12 cents a share.
Revenue rose 7 per cent to $619.8-million.
Analysts, on average, had expected WestJet to report, earnings of 15 cents a share, before items, on revenue of $610.9-million, according to Thomson Reuters I/B/E/S.
WestJet's shares were down 2.5 per cent, or 35 cents, at $13.30 on the Toronto Stock Exchange early on Tuesday.
The airline's revenue per available seat mile, or RASM, a key performance measure in the industry, fell by 0.8 per cent in the quarter ended March 31.
"Our yield continued to be under pressure from price-sensitive travellers," CEO Gregg Saretsky said.
WestJet said it expects to see year-over-year RASM gains in the second quarter of 2010 on the back of indications of a stronger load factor and improving yield trends.
The company's capacity increased by 7.9 per cent in the first quarter, driven by expansion of flights to resort destinations.
WestJet, which is Air Canada's biggest domestic competitor, flies to 68 North American cities and the Caribbean.
The results are the first presided over by Mr. Saretsky, who took the top job at the Calgary-based carrier on April 1. Former CEO Mr. Durfy resigned unexpectedly for personal reasons.
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