* Third-quarter profit C$0.50 per share vs est. C$0.48
* Revenue rises 7 pct to C$924.8 mln
Nov 5 (Reuters) - WestJet Airlines Ltd, Canada'ssecond-largest carrier, reported a forecast-beating quarterlyprofit as costs fell, but increased capacity, competition andCalgary floods in July dented the bottom line.
WestJet said it was hitting its three-year targets a yearearlier than planned and its newly launched Encore regionalcarrier was flying full planes and beating expectations.
Cost per available seat mile (CASM), excluding fuel andemployee profit-sharing costs, declined 1.5 percent in the thirdquarter ended Sept. 30.
The company said the fall in costs would be 0.5 percent forthe full year, at the low end of its summer estimate of a 0.5percent to 1 percent decline.
It expected capacity growth to hit between 8 and 8.5 percentfor 2013, while domestic capacity growth was expected to bebetween 4.5 and 5 percent.
The airline also said its 2013 capital spending was slightlyhigher than its forecast, at C$720 million, because one of itsBombardier Q400 planes would be delivered in the fourth quarterinstead of the first quarter of next year.
WestJet said it was on track to save $100 million in costsby the end of 2014, partly from better fuel savings.
The company expected 2014 CASM excluding fuel and profitshare to remain flat to up 1 percent. It expects 2014 capacitygrowth between 4 and 6 percent.
"To the extent that the economy and the demand environmentcontinue to progress, even at a moderate pace, the companyappears well positioned to continue to deliver robust earningsgrowth," BMO analyst Fadi Chamoun said in a client note.
WestJet, which also launched its "Plus" fare product optionin August, is facing increased competition after bigger rivalAir Canada boosted capacity with the summer launch ofits discount vacation airline, Rouge.
Air Canada reported strong third-quarter traffic last monthand said its cost-control measures had exceeded expectations.
Executives told analysts that the Encore regional operationswere beating targets, although that was unlikely to continuelong-term as the carrier adds new routes with more competition.
"When we analyze the numbers ... we (are) ahead of our baseor plan, and very excited about how it's tracking to date, andhow that projects into 2014. So, so far so good on really allfronts," said Bob Cummings, executive vice-president of sales,marketing and guest experience.
WestJet's revenue per available seat mile, the key measureof an airline's efficiency, fell about 4 percent in the thirdquarter and the company said it would remain at a similar levelin the current quarter.
The low-cost airline said its load factor, a measure of howfull its planes are, fell to 82.8 percent in the third quarterfrom 84.6 percent a year earlier. Traffic increased by 8.7percent during the quarter as capacity increased by 11 percent.
Net income dropped to C$65.1 million, or 50 Canadian centsper share, in the quarter from C$70.6 million, or 52 Canadiancents per share, a year earlier.
Analysts on average had expected earnings of 48 Canadiancents, according to Thomson Reuters I/B/E/S.
Revenue grew nearly 7 percent to C$924.8 million ($888.5million), but was slightly below the average analyst estimate ofC$925.6 million.
WestJet shares, which have risen some 25 percent in the lastthree months, were up 5 Canadian cents at C$27.35 on the TorontoStock Exchange by mid afternoon.
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