WestJet Airlines Ltd's revenue rose for the seventh straight quarter, as the Canadian carrier expanded its fleet and flew more passengers.

Canada's second largest airline said on Tuesday its passenger traffic rose 8.8 percent in the fourth quarter ended Dec. 31, while passenger carrying capacity ticked up 5.6 per cent.

WestJet has been targeting both price-conscious and rich customers as it locks horns with chief rival Air Canada in an intensifying battle for market share.

Calgary-based WestJet plans to launch a low priced carrier called Swoop in June.

"The company should continue to transform themselves into a global airline, while introducing its new ultra-low cost brand, Swoop, to the Canadian market," analysts at Cowen & Co said.

A strengthening global economy has helped WestJet hike fares, they added.

WestJet said in October it would increase capacity this year as it operates more international flights.

While higher capacity and traffic helped earnings, rising fuel prices limited the boost.

WestJet's fuel prices jumped 19.5 per cent year-over-year in the fourth quarter, sending operating expenses up 11.5 per cent to $1.04 billion. Cost per available seat mile — a measure of how much an airline spends to fly a passenger — also rose.

Net earnings fell to $48.5 million from $55.2 million a year earlier.

Excluding one-time items, WestJet earned 42 cents per share, in line with analysts' average estimate, according to Thomson Reuters I/B/E/S.

Shares of WestJet fell 1.4 per cent on the Toronto Stock Exchange amid a selloff in the broader market.