Air Canada 2009 Annual Report Download - page 16

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2009 Air Canada Annual Report
16
System passenger revenues decreased 7.0% from the fourth quarter of 2008
Compared to the fourth quarter of 2008, passenger revenues decreased $152 million or 7.0% to $2,030 million in the
fourth quarter of 2009 due to a system yield decrease. In the fourth quarter of 2009, passenger revenues from the premium
cabin accounted for 22% of the total decrease in system passenger revenues. The decrease in premium cabin revenues was
driven by a 7.2% decline in yield as premium cabin traffi c was essentially unchanged from the same period in 2008.
In the fourth quarter of 2009, Air Canada increased its overall capacity by 2.0% from the fourth quarter of 2008. Capacity
in the North American market was reduced by 1.0% while capacity in the international market was increased by 5.0%, from
the same quarter in 2008. Components of the year-over-year change in fourth quarter system passenger revenues included:
• A system traffi c increase of 0.4% on a capacity increase of 2.0%, which resulted in a 1.3 percentage point decline in
system passenger load factor compared to the fourth quarter of 2008. The system capacity growth of 2.0% in the
fourth quarter of 2009 compared to the fourth quarter of 2008 was in line with the 1.0% to 2.0% ASM capacity
increase projected in Air Canada’s news release dated November 6, 2009.
• A system yield decline of 7.3% from the fourth quarter of 2008, which was due to a weak economy, greater fare
discounting in an effort to stimulate traffi c and reduced fuel surcharges year-over-year. This was an improvement from
the second and third quarters of 2009 where yield declined 8.9% and 11.2%, respectively, from the corresponding
periods in 2008. In the fourth quarter of 2009, the economy cabin refl ected a yield decline of 7.6% while the
premium cabin refl ected a yield decline of 7.2% compared to the same quarter in 2008. All markets refl ected yield
decreases with the exception of the U.S. transborder market.
• A RASM decrease of 8.8% from the fourth quarter of 2008, which was due to both the yield decline and the decrease
in passenger load factor. This was an improvement from the second and third quarters of 2009 where RASM declined
11.3% and 10.2%, respectively, from the corresponding periods in 2008.
The table below describes year-over-year percentage changes in fourth quarter passenger revenues, capacity, traffi c,
passenger load factor, yield and RASM.
Fourth Quarter 2009
Versus
Fourth Quarter 2008
Passenger
Revenue
% Change
Capacity
(ASMs)
% Change
Traffi c
(RPMs)
% Change
Passenger
Load Factor
pp Change
Yield
% Change
RASM
% Change
Canada (7.9) (0.6) (1.3) (0.5) (6.7) (7.3)
US transborder (3.7) (1.8) (5.0) (2.5) 1.4 (1.9)
Atlantic (4.8) 6.7 2.4 (3.3) (7.0) (10.8)
Pacifi c (9.7) 6.5 4.2 (1.8) (13.4) (15.2)
Other (10.8) (0.1) 3.3 2.6 (13.7) (10.7)
System (7.0) 2.0 0.4 (1.3) (7.3) (8.8)
Domestic passenger revenues decreased 7.9% from the fourth quarter of 2008
Domestic passenger revenues of $883 million in the fourth quarter of 2009 decreased $77 million or 7.9% from the fourth
quarter of 2008 due to a lower yield and reduced traffi c. In the fourth quarter of 2009, Air Canada reduced its domestic
capacity by 0.6% from the fourth quarter of 2008. Capacity reductions on transcontinental routes were largely offset by
capacity increases on routes to the Maritimes and within central and western Canada. Components of the year-over-year
change in fourth quarter domestic passenger revenues included:
• A traffi c decline of 1.3% on a capacity reduction of 0.6%, which resulted in a 0.5 percentage point decline in
passenger load factor. All major domestic services refl ected passenger load factor decreases with the exception
of transcontinental routes, linking Toronto, Montreal and Ottawa with major western Canadian cities, including
Winnipeg, Calgary, Edmonton and Vancouver.
• A yield decrease of 6.7% from the fourth quarter of 2008, which refl ected the continued weak economic environment
and greater fare discounting in an effort to stimulate traffi c. All major domestic services recorded yield declines with
the exception of Rapidair routes, linking Toronto and Montreal/Ottawa.