Canadian carrier WestJet has announced that it will defer the delivery of one Boeing 737 next year, and two more in 2012, and has rescheduled the deliveries for 2017.

The airline now expects to take delivery of six 737s in 2011 and five more in 2012. WestJet chief executive Gregg Saretsky says that "economic uncertainty has caused us to re-think our short-term capacity plan".

WestJet announced the deferrals as it reported second quarter net income of $21 million, compared to $9.2 million for the year prior. Income excluding special items was $23.4 million.

Operating revenues increased 15.2% to $612 million, but a 15.7% increase in operating expenses caused operating margin to slip by 0.3 points to 6.9%.

Despite a 1.1% decrease in yield, WestJet's revenue per available seat mile (RASM) increased 4%, to 12.8 cents, thanks to a 3.9 point year-over-year increase in load factor.

WestJet's cost per available seat mile (CASM) was up 4.4% year-over-year, mainly due to a 14.5% per litre increase in fuel cost. CASM excluding fuel and profit sharing decreased by 0.1%.

The airline increased capacity by 10.9% in the second quarter, and is forecasting an 11% to 12% increase in the third quarter. The company reports that the majority of additional capacity will be on routes outside of Canada, saying that it "believes the Canadian economy needs to rebound further before it can support more new domestic capacity growth".

Source: Air Transport Intelligence news