WestJet anticipates its capacity growth should slow significantly in 2017 and that unit costs will continue to creep higher, according to regulatory documents filed by the Calgary-based company on 1 November.

The carrier now anticipates its capacity in 2017 will be up 3.5% to 5.5% year-over-year, and that cost per available seat mile (CASM), excluding fuel and profit sharing expenses, will increase 2.5% to 3.5% year-over-year.

That predicted CASM growth will result primarily from expansion of WestJet's Encore division, which operates Bombardier Q400s – aircraft that have higher unit costs, WestJet says.

The latest 2017 capacity figures, if they prove accurate, would represent a notable slowing of growth by WestJet.

The carrier now anticipates capacity in the fourth quarter of 2016 will increase 10.5% to 11.5% year-over-year, and that full-year 2016 capacity growth will be about 9%, regulatory documents show.

Much of WestJet's 2016 expansion has come from the company's launch in 2016 of five new routes to London Gatwick airport using WestJet's first widebodies, Boeing 767-300ERs, the carrier notes.

WestJet expects CASM will decline 1.0% to 2.0% in the fourth quarter of 2016 and be up about 3.0% for the full year 2016.

WestJet also expects fourth quarter revenue per available seat mile (RASM) will decline between 4.0% and 6.0% due to factors including recent deployment of 767s, a shorter-than-usual holiday season and fare cuts on domestic and warm-weather routes, it says.

The company does not provide specific 2017 unit revenue expectations, but does anticipate seeing positive year-over-year RASM growth in the first quarter of 2017, it says.

Source: Cirium Dashboard