Air Canada 2010 Annual Report Download - page 13

2010 Management’s Discussion and Analysis
13
System passenger revenues increased 13.1% from the fourth quarter of 2009
System passenger revenues increased $266 million or 13.1% to $2,296 million from the fourth quarter of 2009. Fourth
quarter 2010 passenger revenues included a favourable annual adjustment of $40 million related to the airline’s transatlantic
joint venture, which was finalized in December 2010 but with effect as of January 1, 2010, with United Airlines and Deutsche
Lufthansa AG and to other interline agreements. For comparative purposes, the discussion and tables below exclude the
impact of the $40 million favourable adjustment recorded in the fourth quarter of 2010.
On an adjusted basis, system passenger revenues increased $226 million or 11.2% to $2,256 million from the fourth
quarter of 2009. Premium cabin revenues increased $88 million or almost 21% from the same quarter in 2009, due to a
16.9% increase in traffic and a 2.2% improvement in yield.
In the fourth quarter of 2010, Air Canada’s overall capacity was 7.8% higher than the fourth quarter of 2009, with capacity
growth reflected in all markets. Overall capacity in the international markets, including the U.S. transborder market,
increased 11.4% from the fourth quarter of 2009. This capacity growth is consistent with one of Air Canada’s 2010 key
priorities to expand its international operations and to leverage its hub at Toronto Pearson International Airport as a global
transfer point for travelers en route to domestic, U.S. transborder and international destinations.
The table below provides year-over-year percentage changes in fourth quarter passenger revenues, capacity, traffic,
passenger load factor, yield and RASM.
Fourth Quarter 2010
Versus
Fourth Quarter 2009
Passenger
Revenue
% Change
Capacity
(ASMs)
% Change
Traffic
(RPMs)
% Change
Passenger
Load Factor
pp Change

Yield
% Change

RASM
% Change
Canada 7.5 0.2 2.0 1.4 5.3 7.1
US transborder 10.7 11.7 12.0 0.2 (1.3) (1.0)
Atlantic 7.5 5.5 2.5 (2.8) 4.7 1.7
Pacific 31.7 23.0 22.9 (0.1) 7.2 7.0
Other 15.4 7.2 9.4 1.6 5.4 7.5
System 11.2 7.8 8.0 0.2 2.8 3.0
The table below provides year-over-year percentage changes in system passenger revenues, capacity, traffic, passenger load
factor, yield and RASM by quarter for the fourth quarter 2010 and each of the previous four quarters.
Year-over-Year by Quarter (% Change)
System Q4’09 Q1'10 Q2'10 Q3’10 Q4’10
Passenger Revenues (7.0) 4.2 12.4 13.4 11.2
Capacity (ASMs) 2.0 6.6 5.3 8.2 7.8
Traffic (RPMs) 0.4 6.4 8.7 9.7 8.0
Passenger Load Factor (pp Change) (1.3) (0.1) 2.6 1.2 0.2
Yield (7.3) (2.2) 3.3 3.2 2.8
RASM (8.8) (2.3) 6.6 4.7 3.0
Components of the year-over-year change in fourth quarter system passenger revenues included:
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improvement of 0.2 percentage points from the fourth quarter of 2009. This system capacity growth was in line
with the 7.0% to 8.0% fourth quarter 2010 ASM capacity increase projected in Air Canada’s news release dated
November 4, 2010.
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in the economic environment as well as the impact of Air Canada’s renewed focus on improving the quality of
its revenues and promoting its business class services. The year-over-year fourth quarter yield improvement was
achieved in spite of an unfavourable impact relating to the stronger Canadian dollar on foreign currency denominated