Air Canada 2009 Annual Report Download - page 25

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2009 Management’s Discussion and Analysis
25
Domestic passenger revenues decreased 12.6% from 2008
Domestic passenger revenues of $3,591 million in 2009 decreased $517 million or 12.6% from 2008 due to an 8.7% decline
in yield and a 4.1% decrease in traffi c. In 2009, capacity reductions were refl ected on all major services with the exception
of routes to the Maritimes and within central and western Canada. Components of the year-over-year change in domestic
passenger revenues included:
• A traffi c decline of 4.1% on a capacity reduction of 3.7%, which resulted in a 0.3 percentage point decline in
passenger load factor. All major domestic services refl ected passenger load factor decreases with the exception of
transcontinental routes.
• A yield decrease of 8.7% from 2008, which refl ected the continued weak economic environment resulting in a
decline in higher yielding product bookings and greater fare discounting in an effort to stimulate traffi c. All major
domestic services recorded yield declines.
• A weaker Canadian dollar in 2009 versus 2008, which had a positive impact on foreign currency denominated
revenues of $38 million in 2009.
• A RASM decline of 9.1% from 2008, which was primarily due to the lower yield.
The table below describes year-over-year percentage changes in domestic passenger revenues, capacity, traffi c, passenger
load factor, yield and RASM by quarter and for the full year.
2009 versus 2008 (% change)
Canada Q1 Q2 Q3 Q4 Full Year
Passenger Revenue (11.4) (17.0) (13.3) (7.9) (12.6)
Capacity (ASMs) (7.3) (5.8) (1.5) (0.6) (3.7)
Traffi c (RPMs) (8.3) (8.2) 0.7 (1.3) (4.1)
Passenger Load Factor (pp Change) (1.0) (2.1) 1.8 (0.5) (0.3)
Yield (3.3) (9.5) (13.6) (6.7) (8.7)
RASM (4.4) (11.9) (11.7) (7.3) (9.1)
U.S. transborder passenger revenues decreased 12.5% from 2008
U.S. transborder passenger revenues of $1,641 million in 2009 decreased $235 million or 12.5% from 2008 due to lower
traffi c and a reduced yield. Capacity was reduced on all major U.S. transborder services with the exception of routes to
Florida. Components of the year-over-year change in U.S. transborder passenger revenues included:
• A traffi c decline of 9.6% on a capacity reduction of 7.7%, which resulted in a passenger load factor decline of
1.6 percentage points from 2008.
• A yield decrease of 3.2% from 2008, which refl ected the continued weak economic environment and greater
fare discounting in an effort to stimulate traffi c as well as more aggressive pricing as a result of competitive growth
on U.S. leisure routes. Yield declines were refl ected on all major U.S. transborder services with the exception of
U.S. short-haul business routes between Eastern Canada and Northeastern U.S.
• A weaker Canadian dollar in 2009 versus the fourth quarter of 2008, which had a positive impact on foreign currency
denominated revenue of $60 million in 2009.
• A RASM decrease of 5.1% from 2008, which was due to both the yield decline and the decrease in passenger
load factor.