Air Canada 2008 Annual Report Download - page 28

2008 Air Canada Annual Report
28
• In2008,RASMincreased6.9%from2007duemostlytothegrowthinyieldbutalsotothepassengerloadfactor
improvement.
Pacific passenger revenues increased 3.0% from 2007
Pacific passenger revenues of $995 million in 2008 increased $28 million or 3.0% from 2007 due entirely to yield growth.
The positive impact of the higher yield was partially offset by a decrease in traffic. Factors contributing to the year-over-
year change in Pacific passenger revenues included:
• In2008,capacitywasreducedby4.4%from2007,reectingcapacityreductionsinallmarketswiththeexception
of China.
• In2008,trafcdecreased2.1%onacapacityreductionof4.4%resultinginpassengerloadfactorimprovementof
2.0 percentage points from 2007.
• In2008,yieldincreased5.1%from2007largelyduetoincreasedfaresandfuelsurchargestopartiallyoffsethigher
fuel prices. Yield improvements were recorded in the Chinese, Japanese and Hong Kong markets while the Korean
market reflected a yield decline. The Korean market was negatively impacted by local currency devaluation. Yield in
the Chinese market was positively impacted by the Olympic Games where Air Canada was able to favourably price
fares as a result of strong market demand. The higher yield on Pacific routes was achieved in spite of a 6.0% increase
in average stage length compared to the same period in 2007.
• The stronger Canadian dollar had a negative impact on foreign currency denominated revenues.  The impact
accounted for a decrease of $12 million to 2008 Pacific passenger revenues compared to 2007.
• In2008,RASMincreased7.7%from2007primarilyduetothegrowthinyieldbutalsoduetothepassengerload
factor improvement.
Other passenger revenues increased 21.2% from 2007
Other passenger revenues (comprised of South Pacific, Caribbean, Mexico and South America) of $851 million in 2008
increased $149 million or 21.2% from 2007 primarily due to traffic growth. Factors contributing to the year-over-year
change in other passenger revenues included:
• In2008,trafcincreased18.2%onacapacitygrowthof16.4%resultingina1.2percentagepointimprovementin
passenger load factor from 2007. Traffic growth in these markets mainly reflected the addition of a new non-stop
service from Vancouver to Sydney, Australia which is served by a Boeing 777-200 aircraft. In 2007, this one-stop
service via Hawaii was previously served by a Boeing 767-300 aircraft and the Vancouver-Hawaii segment was
recorded in US transborder passenger revenues. Higher capacity mainly reflected increased flying on Air Canada
Vacations routes, and to South America. Air Canada’s one-stop service to Chile and Argentina was increased to a
daily service this past summer versus five times per week in 2007. In addition, overall capacity to South America was
substantially increased on December 1, 2008 compared to the same period in 2007.
• In 2008, yield improved 2.5% from 2007 largely due to fare increases to partially offset higher fuel prices. An
increase in the proportion of higher-yielding business travelers was also a factor in the yield growth reflecting in part
a greater demand for Air Canada’s new Executive First product.
• The stronger Canadian dollar had a negative impact on foreign currency denominated revenues.  The impact
accounted for a decrease of $11 million to 2008 other passenger revenues compared to 2007.
• In2008,RASMincreased4.1%from2007duetoboththeyieldgrowthandthepassengerloadfactorimprovement.