Air Canada 2012 Annual Report Download - page 29

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2012 Management’s Discussion and Analysis
29
In the fourth quarter of 2012, Atlantic capacity was essentially unchanged from the fourth quarter of 2011. Capacity increases
on services to Brussels, Paris and Frankfurt were essentially offset by capacity reductions on services from Western Canada to
the U.K., and by the impact of an earlier end to summer seasonal operations to Rome and Athens.
Components of the year-over-year change in fourth quarter Atlantic passenger revenues included:
The 5.6% traffic increase which reflected traffic growth on all major Atlantic services.
The 7.8% yield increase which was due to an improvement in the proportion of higher-yielding passengers in the
economy and premium cabins, gains in premium cabin traffic, and increased fares and fuel surcharges to partly offset
higher fuel prices. Partly offsetting the yield improvement was an unfavourable currency impact of $6 million.
The 13.7% RASM increase was due to the higher yield and a 4.1 percentage point improvement in passenger load factor.
Pacific passenger revenues increased 12.9% from the fourth quarter of 2011
In the fourth quarter of 2012, Pacific passenger revenues of $316 million increased $37 million or 12.9% from the fourth
quarter of 2011 primarily due to traffic growth on services to Japan and an overall yield increase of 7.7%.
The table below provides year-over-year percentage changes in Pacific passenger revenues and operating statistics for the
fourth quarter 2012 and each of the previous four quarters.
Pacific Year-over-Year by Quarter (% Change)
Q4'11 Q1'12 Q2'12 Q3'12 Q4'12
Passenger revenues 6.9 17.8 18.5 13.9 12.9
Capacity (ASMs) 1.4 2.3 3.0 (0.5) 2.3
Traffic (RPMs) 1.6 3.5 4.0 0.5 5.1
Passenger load factor
(pp change) 0.1 1.0 0.8 1.0 2.3
Yield 4.7 12.8 14.0 13.3 7.7
RASM 4.9 14.1 15.1 14.5 10.6
In the fourth quarter of 2012, the 2.3% Pacific capacity increase was driven by capacity growth on services to Japan partly
offset by capacity reductions on services to Korea and Hong Kong. The capacity growth on Air Canada’s Japan service was
mainly due to the addition of three flights per week on the airline’s Calgary to Narita route.
Components of the year-over-year change in fourth quarter Pacific passenger revenues included:
The 5.1% traffic increase which reflected, in large part, traffic growth on services to Japan.
The 7.7% yield increase which reflected yield growth on all major Pacific services with the exception of Japan where the
added capacity put pressure on yields. The overall yield improvement was due to higher fuel surcharges to partly offset
higher fuel prices, fare increases, and the introduction of Tango® fares on services to Korea, with reduced Aeroplan® Miles
offered which, in turn, produced strong buy-up to higher-yielding Tango® Plus fares. A significant yield increase in the
premium cabin and changes to the airline’s fare structure were also factors in the Pacific yield improvement year-over-
year.
The 10.6% RASM increase was due to the yield growth and a 2.3 percentage point improvement in passenger load factor.