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Air Canada is striving to be cautious in adding seat capacity as the fragile economy improves, content to wait until mid-2013 to take delivery of new jets, even though its rivals are bulking up.

The country's largest airline has the flexibility to sign contracts to deploy Boeing 767s, if necessary, since those used planes are available on the secondary market, said Air Canada chief executive officer Calin Rovinescu.

Montreal-based Air Canada is slated to start receiving new Boeing 787 Dreamliners in mid-2013, and Mr. Rovinescu said he will be patient over the next three years.

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"We're going to concentrate on managing our growth until we receive our 787s," he said during a 14-minute video to employees on YouTube. "This is the discipline that we have to have as an organization. We won't add growth just for the sake of growth."

Calgary-based WestJet Airlines Ltd., however, intends to take delivery of new Boeing 737 jets over the next several years, while Toronto-based Porter Airlines Inc. is preparing to deploy new Bombardier Q400 turboprops in mid-2011.

Mr. Rovinescu said Air Canada will still be nimble, focusing on profitable routes by carefully utilizing existing planes. "Aircraft will be added to the fleet only where there is a compelling business case to be made that we can make money off of it," he said.

Industry observers say Air Canada's cautious approach after the recession appears to be paying off, at least in producing healthy load factors, or the proportion of seats filled by paying customers.

On Tuesday, Air Canada reported that it posted an August load factor of 86.8 per cent, matching the record level for the same month last year, including passengers who boarded its regional affiliate Jazz Air. Seat capacity at Air Canada and Jazz climbed 7 per cent to 6.33 billion available seat miles (ASMs), while traffic kept pace with growth of 7.1 per cent to 5.49 billion revenue passenger miles (RPMs).

By contrast, WestJet's August load factor slipped to 82.2 per cent from 84.5 per cent. The carrier's capacity last month rose 11.3 per cent to 1.75 billion ASMs, but traffic grew at a slower pace of 8.2 per cent to 1.44 billion RPMs.

"We continue to direct the majority of our new capacity toward our southern destinations, as we find the demand for leisure travel continues to be robust," WestJet CEO Gregg Saretsky said in a statement.

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PI Financial Corp. analyst Chris Murray said the August traffic performance by Air Canada and WestJet met his expectations.

"Demand for air travel by Canadians is ongoing," Mr. Murray said in a research note. For Air Canada, "we believe earnings growth will be supported as capacity additions are coming from higher utilization rates as opposed to aircraft additions."

He is forecasting that WestJet will see growth in its vacations unit and make inroads into the market for business travellers.

WestJet has been seeking to woo corporate customers, especially in the Eastern Triangle of Toronto, Montreal and Ottawa, where the airline promotes fares as low as $29 one-way for those willing to book at least 21 days in advance.









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