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TORONTO - Air Canada alleges that WestJet Airlines Ltd. ran an espionage campaign code-named the 007 Project to steal confidential data from the larger carrier's "evil empire," allowing WestJet to strategically launch flights to the United States.

In new court filings, Air Canada further alleges that WestJet's snooping was designed in part to thwart the Montreal-based carrier's emergence from bankruptcy protection.

Not only did WestJet spy on Air Canada and defunct Jetsgo Corp., but it also gained access to secret statistics at CanJet Airlines of Halifax, according to documents filed in the Ontario Superior Court.

Air Canada said the latest revelations came to light after court-appointed forensic auditors scrutinized hard drives seized from Calgary-based WestJet.

In April last year, Air Canada launched a $220 million lawsuit accusing WestJet of corporate espionage. WestJet denies any wrongdoing and none of the allegations have been proven in court.

Air Canada sought protection in April, 2003, under the Companies' Creditors Arrangement Act, and emerged from bankruptcy protection in September, 2004.

Benjamin Smith, Air Canada's vice-president of planning, said in an affidavit that WestJet "attempted to undermine" the CCAA process.

Smith attached 24 exhibits to his affidavit, including a copy of an email exchange between WestJet co-founders Mark Hill and Clive Beddoe, WestJet's chairman and chief executive officer.

Hill said in an email from his BlackBerry, dated Sept. 11, 2003, that WestJet obtained a list of Air Canada's 200 weakest routes.

If WestJet were to leak such information, "AC would have some serious back-tracking and explaining to do to potential investors, and would further weaken their credibility in all quarters," Hill said.

Another email written by Hill, WestJet's former vice-president of strategic planning who resigned from the airline in mid-2004, points to the "evil empire" database, referring to Air Canada's load factors, or the proportion of available seats filled.

Code words used in the subject fields of emails included "Schtuff" and "Wayne," to alert recipients that the topic would be the 007 Project, and

Various emails show that Air Canada's confidential data was used by WestJet to help plan transborder flights to the United States from Canada, Smith said.

Forensic auditors have determined that Hill "was analyzing the plaintiff's confidential employee website information in order to assist WestJet in expanding its routes into the United States," Smith said.

Smith alleges WestJet gained access to confidential data from CanJet and Jetsgo, and that WestJet found it "both useful and valuable" to obtain Air Canada's "real-time, flight-specific" information.

He added that Hill sent an email "thoroughly analyzing Jetsgo's, CanJet's and Air Canada's load factors into Florida's destinations" in an effort to plot WestJet's new flights.

Air Canada alleges that WestJet's 007 Project grew increasingly sophisticated as the discount carrier found a way to automate "the accessing and analyzing" of Air Canada's internal data.

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