Air Canada 2007 Annual Report Download - page 18

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2007 Air Canada Annual Report
18
Domestic passenger revenues increased 8.0% from the fourth quarter of 2006
Domestic passenger revenues of $972 million in the fourth quarter of 2007 increased $72 million or 8.0% from the fourth
quarter of 2006, due to both yield and traffi c growth. The following factors contributed to the year-over-year change in
fourth quarter domestic passenger revenues:
■ Traffi c growth of 2.5% on a capacity increase of 3.0% resulting in a decrease in passenger load factor of
0.4 percentage points (pp) over the fourth quarter of 2006. Capacity increases were largely refl ected on the
transcontinental services and also on the Atlantic Canada services and within western Canada.
■ A yield increase of 5.3% largely as a result of a robust market which permitted fare increases.
■ RASM growth of 4.8% due to the higher yield.
■ The inclusion of certain ancillary passenger fees effective January 1, 2007 which contributed 1.6 percentage points
to the yield growth.
US transborder passenger revenues increased 5.4% from the fourth quarter of 2006
US transborder passenger revenues were $456 million in the fourth quarter of 2007, an increase of $24 million or 5.4% from
the fourth quarter of 2006, mainly due to a robust market which permitted fare increases. The following factors contributed
to the year-over-year change in fourth quarter US transborder passenger revenues:
■ Traffi c growth of 1.0% on a capacity increase of 0.1%, resulting in a passenger load factor improvement
of 0.7 percentage points.
■ A yield improvement of 4.3% mainly due to a robust market which permitted fare increases and
the inclusion of certain ancillary passenger fees effective January 1, 2007.
■ RASM growth of 5.3% due to both the yield improvement and the higher passenger load factor.
Atlantic passenger revenues increased 0.3% from the fourth quarter of 2006
Atlantic passenger revenues of $374 million in the fourth quarter of 2007 increased $1 million or 0.3% from the fourth
quarter of 2006. The following factors contributed to the year-over-year change in fourth quarter Atlantic passenger
revenues:
■ Traffi c growth of 4.1% on a capacity increase of 4.4% resulting in a decrease in passenger load factor
of 0.2 percentage points. Traffi c growth was refl ected in the United Kingdom market as a result of the newly
launched Edmonton – London service, increased capacity on the Vancouver – London route and the addition
of the larger Boeing 777 aircraft on the Toronto – London route. Traffi c growth was also refl ected in the France
and German markets as a result of capacity growth driven by the addition of the Boeing 777 aircraft
in these markets.
■ A yield decline of 3.7% due to an aggressive competitive environment mainly in the United Kingdom,
French and German markets. These markets accounted for 90% of Atlantic revenues.
■ A RASM decrease of 4.0% primarily as a result of the decline in yield.
Pacifi c passenger revenues decreased 4.2% from the fourth quarter of 2006
Pacifi c passenger revenues of $209 million in the fourth quarter of 2007 decreased $9 million or 4.2% from the fourth
quarter of 2006, due to both a traffi c decrease and a decline in yield. The following factors contributed to the year-over-year
change in fourth quarter Pacifi c passenger revenues:
■ A traffi c decrease of 2.0% on a capacity increase of 0.3% resulting in a decline in passenger load factor
of 1.9 percentage points. A 45.1% increase in Canada – China capacity was largely offset by the impact of
a capacity decrease in the Japan market and the suspension of service to India.
■ A yield decrease of 2.3% due to growth in longer-haul fl ying. The average stage length increased 15.4% from
the same period in 2006. Long-haul fl ights generally have a lower yield per revenue passenger mile than short-haul
fl ights. When measured on a per mile basis, the average fare paid on long-haul fl ights is relatively lower than
short-haul fl ights.
■ A decrease in RASM of 4.5% due to both the yield decrease and the decline in passenger load factor.