New WestJet discount airline service not expected until next year

Carrier posts $48.4M Q2 profit
WestJet

WestJet (TSX:WJA) says the launch of its new no-frills, low-cost airline won't be until next summer after initially announcing plans it would start offering flights later this year.

The Calgary-based airline says it expects to announce the initial flight schedule early in 2018 with service expected to start in the summer of next year.

The news of the delay came as WestJet reported it earned $48.4 million or 41 cents per diluted share in its latest quarter.

That compared with a profit of $36.7 million or 30 cents per diluted share in the same quarter last year.

Revenue in the quarter totalled nearly $1.06 billion, up from $949.3 million a year ago.

WestJet says its operating margin grew to 7.4 per cent for the three-months ended June 30 compared with 6.5 per cent in the same quarter last year.

Capacity measured by available seat miles increased 6.3 per cent, while traffic measured by revenue passenger miles grew 8.9 per cent.

Meanwhile, Air Canada (TSX:AC) says it earned a record second-quarter profit of $300 million, up from $186 million a year ago.

The airline says the profit amounted to $1.08 per diluted share for the quarter ended June 30 compared with a profit of 66 cents per diluted share in the second quarter of 2016.

On an adjusted basis, Air Canada says it earned $215 million or 78 cents per diluted share for the quarter, up from $203 million or 72 cents per diluted share a year ago.

Revenue totalled $3.91 billion for the three-month period, up from nearly $3.46 billion a year ago, as it increased capacity and saw traffic grow by 13.6 per cent.

Air Canada said its cost per available seat mile increased 0.5 per cent from the second quarter of last year, however it fell on an adjusted basis by 3.5 per cent compared with last year.

That was better than the decrease of 1.5 per cent to 2.5 per cent that had been forecast earlier this year.