Neha Jain: http://canadaaviationnews.blogspot.com/4m

1. UPDATE 2-WestJet, Porter Airlines planes fuller in February

* WestJet Feb load factor 83.6 pct vs 82.5 pct, last year

* WestJet says capacity up 10.7 pct

* Porter Airlines capacity up 18.5 pct (Rewrites, adds Porter Airlines' february load factor and capacity, updates share movement)

March 3 (Reuters) - WestJet Airlines Ltd , Canada's No. 2 carrier, and privately held regional carrier Porter Airlines flew more passengers in February versus a year earlier.

Canada's second-biggest airline WestJet's load factor -- the percentage of available seats filled with paying customers -- rose to 83.6 percent last month from 82.5 percent in February, 2010.

The low-cost airline said revenue passenger miles, or traffic, rose 12.2 percent to 1.36 billion, year-over-year, and capacity, measured in available seat miles, was up 10.7 percent to 1.63 billion, over the same period.

Most of the increase in capacity came in from its trans-border and international routes, WestJet said in a statement.

WestJet, which entered a code-share agreement with American Airlines earlier this week, said consumer demand has been strong and business bookings continue to show strength, moving forward in 2011.

Porter, a small airline that flies out of Toronto's downtown Billy Bishop Airport, said it increased capacity by 18.5 percent and traffic by 28.7 percent over January 2010.

The February load factor rose to 50.6 percent from 46.5 percent, said Porter Airlines, which will also serve Ontario cities of Windsor and Sault Ste. Marie in the next few months.

Calgary-based WestJet shares were trading up more than 1 percent at C$15.65 on Thursday on the Toronto Stock Exchange.

2. ir fares set for record hikes in 2011?

Airfares may be set for a record-breaking series of increases in 2011 as oil prices surge, one leading air travel expert has predicted.
Some of Canada’s biggest airlines, which have already pushed up ticket prices this year in response to rising costs, said they are monitoring the latest spike in crude oil prices closely.

Airfares at some of the biggest U.S. carriers such as United Airlines, Continental and US Airways went up by $10 a round trip this week, while Delta upped its fares by between $10 and $14.

Prices at the big North American airlines have now gone up six times this year, that compares with four hikes in 2010 and three in 2009, according to figures from FareCompare.com, which monitors 500 airlines worldwide.

“We’re on pace for a record,” said FareCompare chief executive and co-founder Rick Seaney, adding there were 17 hikes in 2007. “The first< increases were related to pricing power from the airlines, but the last few have definitely been related to oil prices.”

Prices for the leisure traveller in the U.S. have risen by about $50 this year, or as much as 25% depending on the ticket price, whereas business fares are up $100, or about 15%, Seaney said.

WestJet, Canada’s second-biggest airline, has put up prices three times,once in January and twice in February because of high fuel charges and is continuing to monitor the price of oil. Its increases were between $5 and $10 depending on the distance travelled and the fare class.

Air Canada has also been responding through higher fares and surcharges, but said it was unable to give specific figures on how much prices have risen. Porter Airlines, which flies more fuel-efficient Bombardier Q400 turboprop jets, said it hasn’t imposed any fuel surcharges.

The turmoil in the Middle East has coupled with rising demand to push oil prices to their highest levels in two and a half years. Fuel prices are the biggest expense for an airline accounting for about 30% of costs. WestJet said every one cent increase in the price of jet fuel costs theCalgary-based carrier an extra $10 million.

Air Canada said fuel cost it $2.65 billion last year, with every $1 change in the price of West Texas Intermediate, the benchmark price for U.S. oil, cutting operating income by $25 million.

The spike in oil prices comes just as demand for air travel was picking up again after the slumping during the financial crash, which lead to one of the worst year’s on record for the aviation industry. Analysts said demand in Canada and the rest of the world remains robust and so far the increase in prices is not having an impact on travel.

“The economy has come back quite robustly and business travel is on the increase, so the marketplace is in a position to be fairly resilient so some spikes in oil prices,” Porter president and chief executive Robert Deluce said.

Both WestJet and Porter on Thursday announced an improvement in February load factor, a measure of airline performance.

“There has been continued strength in year-over-year demand and so far there does not seem to be any reason for that to slow down,” said P.I. Financial aviation analyst Chris Murray. “But there is a delicate balance between the price of the fare and demand.”

But the International Air Transport Association warns the pick up in demand will do little to offset the surging costs.

Geneva-based IATA on Wednesday cut its forecast for 2011, saying net profit is likely to be half of last year’s level.

“Political unrest in the Middle East has sent oil over $100 per barrel. That is significantly higher than the $84 per barrel that was the assumption in December,” IATA director general and chief executive Giovanni Bisignani said. “At the same time the global economy is now forecast to grow by 3.1% this year, a full 0.5 percentage point better than predicted just three months ago. But stronger revenues will provide only a partial offset to higher costs.”

3. Business Briefs: American Airlines reaches agreement with Canadian airline
American Airlines and Canada's WestJet Airlines announced a new code-share and frequent-flyer agreement Monday, following an interline agreement they signed in October. The code-share agreement, which allows the carriers to sell each other's flights, is subject to regulatory approval. The carriers say it will allow American customers connecting service to up to 20 new Canadian cities. WestJet will initially put its code on American flights from Canada to Chicago and Boston, with other U.S. cities following later. -- Andrea Ahles
China and U.S. securities
China, the biggest buyer of U.S. Treasury securities, owns a lot more than previously estimated. In an annual revision of the figures, the Treasury Department said Monday that China's holdings totaled $1.16 trillion at year's end, an increase of 30 percent over the government's estimate two weeks ago. The change was based on more accurate information obtained in an annual survey that better determines owners of Treasury securities.
-- The Associated Press
Madoff's yacht dispute
The trustee liquidating convicted con man Bernard Madoff's firm asked a bankruptcy judge to approve an agreement with an investment firm over the disputed ownership of Madoff's yacht, the Bull. Financiere Meeschaert SA will pay $500,000 to Madoff Securities International Ltd. and drop its claim to the yacht. The U.S. attorney's office in New York, which has forfeited the yacht, won't pursue any civil claims against Meeschaert regarding its attempts to seek ownership of the yacht, according to the filing. A U.K. court last year declined to rule on the ownership of the $7 million yacht. The Bull had been seized by French authorities the previous year at the request of Meeschaert.
-- The Associated Press
CEO gets $1 annual salary
Citigroup CEO Vikram Pandit received $1 in total compensation for 2010, according to an Associated Press analysis of a regulatory filing. In a securities filing Monday, the New York bank said Pandit's salary was $1. He received no bonus or stock awards. Citigroup was among the hardest-hit of the large U.S. banks during the financial crisis that peaked in 2008 and was bailed out twice by the government for a total of $45 billion.

By
Neha Jain

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