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WestJet profit dips but tops expectations

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WestJet Airlines Ltd (WJA-T) said on Wednesday its quarterly earnings dipped in the fourth quarter but the result topped expectations for Canada's second-largest air carrier as revenue jumped.

The company also said its employees had endorsed its plan to start a regional carrier using a fleet of turboprop aircraft to serve smaller Canadian markets.

Earnings dipped to $35.6 million, or 26 cents a share, from $37.2 million, or 26 cents, in the same period last year.

Analysts, on average, had forecast earnings of 20 cents a share, according to Thomson Reuters I/B/E/S.

Revenue increased nearly 13 percent to C$781.5 million.

WestJet, which may launch the short-haul service as early as 2013 with a fleet of about 40 turboprops, said it will now ask for proposals from Bombardier Inc. (BBD.B-T), for its Q400 NextGen plane, and ATR, a joint venture of aerospace group EADS and Italian defence group Finmeccanica, for its ATR 72-600 aircraft.

The new routes would bring WestJet into head-on competition with its biggest rival Air Canada, which is the only carrier on some routes between smaller towns.

Calgary, Alberta-based WestJet increased its quarterly dividend by a penny to 6 cents, and approved a share buy back plan for up to 5 percent of its outstanding shares.

WestJet forecast 2012 costs per available seat mile, excluding fuel and employee profit sharing, to be unchanged to up to 1 percent higher year-over year.

It expects modest year-over-year growth in first-quarter revenue per available seat mile, an industry measure to compare revenue performance among airlines.

"Our forward bookings remain healthy as we have not seen any negative impact despite the ongoing broader economic uncertainty," Chief Executive Gregg Saretsky said in a statement.

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