Air Canada 2010 Annual Report Download - page 25

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2010 Management’s Discussion and Analysis
25
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factor improvement.
U.S. transborder passenger revenues increased 9.5% from 2009
U.S. transborder passenger revenues of $1,797 million in 2010 increased $156 million or 9.5% from 2009 due to traffic
growth. Components of the year-over-year change in U.S. transborder passenger revenues included:
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0.6 percentage points from 2009. The capacity growth in 2010 is consistent with one of Air Canada’s key priorities
of increasing connecting traffic from the U.S. in support of the airline’s international expansion strategy.
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foreign currency denominated U.S. transborder passenger revenues, which accounted for a decrease of $72 million
to 2010 U.S. transborder passenger revenues. Yield improvements were reflected on routes from Canada to Las Vegas,
Western Canada to Western U.S. and in other U.S. long-haul markets, while capacity increases as well as increased
competition on key U.S. transborder routes such as Boston, New York (LaGuardia) and Newark, New Jersey, and on
routes to California and Hawaii resulted in lower yields.
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points.
Atlantic passenger revenues increased 14.0% from 2009
Atlantic passenger revenues of $1,962 million in 2010 increased $241 million or 14.0% from 2009 due to traffic growth
and yield improvement. In 2010, Atlantic capacity increased 7.1% from 2009, with capacity increases reflected on all major
Atlantic services with the exception of routes to France and the U.K. The capacity increases in 2010 were partly offset by
capacity decreases caused by the airport closures associated with the Icelandic volcano eruption in April 2010. Components
of the year-over-year change in Atlantic passenger revenues included:
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passenger load factor. Traffic growth was driven by an increase in Canadian and U.S. originating traffic to Europe,
Africa and Tel Aviv, as well as an increase in European originating traffic traveling both to Canada and the U.S., a result
of Air Canada’s international growth strategy and the airline’s participation in the A++ transatlantic joint venture.
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return in business travel demand and the airline’s strong focus on promoting premium services. The year-over-year
Atlantic yield improvement was achieved in spite of a $106 million unfavourable impact of a stronger Canadian
dollar on foreign currency denominated Atlantic passenger revenues.
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Pacific passenger revenues increased 31.1% from 2009
Pacific passenger revenues of $1,087 million in 2010 increased $258 million or 31.1% from 2009 due to traffic and yield
growth. In 2010, capacity increased 18.4% from 2009 with growth reflected on all major Pacific services. Components of
the year-over-year change in Pacific passenger revenues included:
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2.8 percentage points from 2009. Air Canada increased its capacity in the Pacific with the introduction of a Calgary-
Narita non-stop service in March 2010, the use of larger aircraft on routes from Toronto and Vancouver to Narita, and
additional frequencies from Vancouver to Beijing and Shanghai. The strong year-over-year traffic gains were driven
by attracting passengers originating from Air Canada’s international points of sale as well as from Canada and the
U.S.
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over-year Pacific yield improvement was achieved despite a $48 million unfavourable impact of a stronger Canadian
dollar on foreign currency denominated Pacific passenger revenues.