UPDATE 2-WestJet's revenue rises for 7th straight quarter as bigger fleet helps

helps@ (Adds analyst comment, details on earnings, background)

Feb 6 (Reuters) - 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 percent.

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 percent year-over-year in the fourth quarter, sending operating expenses up 11.5 percent to C$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 C$48.5 million from C$55.2 million a year earlier.

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

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

($1 = 1.2524 Canadian dollars) (Reporting by Anirban Paul in Bengaluru; Additional reporting by Allison Lampert; Editing by Savio D'Souza and Sai Sachin Ravikumar)