WestJet said on Wednesday its fourth-quarter earnings fell 45.9 percent due to the turmoil in the economy that has affected the entire airline industry, and warned that its first-quarter results may be weaker.

WestJet, Canada's number 2 carrier earned CAD$40.8 million (USD$32.6 million), or 32 Canadian cents a share, in the quarter, down from CAD$75.4 million, or 57 Canadian cents, in the fourth quarter of 2007.

While airlines have benefited from a drop in fuel costs as oil prices fall, the weak economy is squeezing profits.

Sean Durfy, WestJet's chief executive, said in a statement that the company expects its revenue per available seat mile (RASM), a key profitability ratio, to fall in the first quarter of this year.

"It is too early for us to accurately comment on first-quarter traffic and revenues. However, based on current booking and revenue trends, and taking into consideration that Easter is in April this year versus March last year, we are seeing downward pressure on our yields," Durfy said. "This is contributing to an expected decline in year-over-year RASM for the first quarter of 2009."

Despite economic turmoil, WestJet has been filling more seats on its planes even as it boosts capacity. However a two-month strike at aircraft manufacturer Boeing last year delayed deliveries of some new 737 aircraft that WestJet had been expecting.

Because of the delays, the airline expects capacity growth of between 6 and 7 percent for the first quarter of 2009 and 5 percent for all of 2009. Its capacity rose by nearly 18 percent last year.

The Canadian carrier has also been expanding its reach, saying earlier this month it has agreed to study a code-sharing alliance with Air France and its KLM subsidiary, following a similar agreement with Southwest Airlines that takes effect this year.

WestJet's revenue rose 11.6 percent to CAD$615.8 million from CAD$552 million in the year-earlier quarter.