Air Canada flights were fuller in December and 2013 despite domestic competition

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Air Canada’s planes flew with a record number of filled seats in December and in 2013 as its system-wide traffic outpaced the increase in capacity despite the challenges of tough domestic competition.

The country’s largest airline said its load factor increased to 82.7 per cent in December, up from 82.1 per cent a year earlier. Fueled by a 6.4 per cent boost in U.S. transborder traffic, total system-wide traffic increased 4.8 per cent on a four-per-cent increase in capacity.

However, the carrier’s (TSX:AC.B) domestic flights took off with a slightly greater proportion of empty seats in December as the load factor dipped 1.3 percentage points to 82.4 per cent. Traffic increased 4.6 per cent while capacity grew by 6.3 per cent.

The load factor on U.S. transborder flights increased by three percentage points to 78.6 per cent in the month as traffic growth nearly tripled the 2.3 per cent increase in capacity.

Flights across the Atlantic were less full, but flights on Pacific routes and to Latin America and the Caribbean were up. Air Canada’s results include its low-cost Air Canada rouge operations, which launched July 1, and regional airlines from which Air Canada purchases capacity.

For the full-year, the load factor increased by 0.1 percentage point to 82.8 per cent. Traffic grew by 2.1 per cent, outpacing the 1.9 per cent increase in capacity.

“These strong results, for both the month and full year, underscore the effectiveness of Air Canada’s disciplined capacity management and our award winning product,” stated CEO Calin Rovinescu.

Domestic traffic increased 2.1 per cent in 2013, ahead of the 1.9 per cent increase in capacity, pushing the load factor up by 0.2 percentage points to 82.8 per cent.

Transborder traffic increased 1.7 per cent on a 2.1 per cent decrease in capacity.

WestJet Airlines Ltd. (TSX:WJA) said Monday that its load factor dipped in December to 81.7 per cent, from 81.9 per cent a year ago.

Passenger traffic grew 7.2 per cent last month compared with last year, while capacity increased 7.4 per cent.

For the full year, WestJet reported a load factor of 81.7 per cent, down from 82.8 per cent in 2012. Capacity increased 8.6 per cent, while passenger traffic increased 7.3 per cent.

“We are very pleased to finish the year with our second-highest fourth quarter and full-year load factors,” WestJet president and chief executive Gregg Saretsky said in a statement.

The increase in capacity came as WestJet launched a regional service called WestJet Encore, which flies to smaller communities using Bombardier’s Q400 turboprops.

The regional airline started flying in Western Canada this year and plans to launch in Toronto next summer. Air Canada has countered by adding Q400s flown by Jazz in the west, while both carriers face Porter Airlines which offers service in Eastern Canada from its base at Toronto’s downtown island airport.

Air Canada is also expanding its relationship with Air Georgian, which will operate additional routes in Canada and the United States in mid-2014, as it looks to reduce costs and protect its turf from WestJet Encore.

Note to readers: This is a corrected story. An earlier version incorrectly stated WestJet’s December load factor was the second-highest for the month

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