Air Canada 2010 Annual Report Download - page 26

2010 Air Canada Annual Report
26
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improvement.
Other passenger revenues increased 10.4% from 2009
Other passenger revenues (comprised of Australia, Caribbean, Mexico and Central and South America) of $791 million in
2010 increased $74 million or 10.4% from 2009, mainly due to traffic growth. In 2010, a year-over-year capacity increase
of 7.6% was largely driven by increased frequencies to the Caribbean and Mexico and, starting in June 2010, increased
frequencies to Caracas and Bogotá. In 2009, capacity to and from Mexico was significantly impacted by reduced flying
caused by concerns over the H1N1 influenza virus. Components of the year-over-year increase in Other passenger revenues
included:
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of 1.8 percentage points versus 2009.
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Yields on certain routes to traditional leisure destinations were negatively impacted by competitive pricing activities.
The year-over-year Other yield improvement was achieved despite a $19 million unfavourable impact of a stronger
Canadian dollar on foreign currency denominated Other passenger revenues.
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Cargo revenues increased 29.9% from 2009
In 2010, fueled by traffic growth of 34.0%, cargo revenues amounted to $466 million, a $108 million or 29.9% increase
from 2009. Traffic growth was recorded in all markets. System cargo yield per RTM declined 3.1% from 2009, mainly due
to continued competitive pressure on rates and the unfavourable impact of a stronger Canadian dollar on foreign currency
denominated revenues. Excluding the unfavourable impact of foreign exchange of $35 million relating to the stronger
Canadian dollar on foreign currency denominated cargo revenues, yield per RTM increased 3.9% from 2009.
The table below provides the dollar change in cargo revenues as well as year-over-year percentage changes in cargo revenues,
capacity as measured by ETM, revenue per ETM, traffic as measured by RTM, and yield per RTM for 2009 and 2010.
Year 2010
Versus
Year 2009
Cargo
Revenue
$ Change
(millions)
Cargo
Revenue
% Change
Capacity
(ETMs)
% Change
Rev / ETMs
% Change
Traffic
(RTMs)
% Change
Yield / RTM
% Change
Canada 6 9.4 (4.5) 14.6 11.9 (3.1)
U.S transborder 3 18.4 13.2 4.6 30.1 (9.0)
Atlantic 37 29.0 5.8 21.9 35.6 (4.9)
Pacific 52 45.6 17.4 24.1 38.8 5.0
Other 10 25.0 4.4 19.8 29.8 (3.7)
System 108 29.9 7.5 20.9 34.0 (3.1)
Other revenues increased 1% from 2009
Other revenues of $893 million in 2010 increased $11 million or 1% from 2009 due to a $50 million or 14% increase
in third party revenues at Air Canada Vacations, largely driven by an increase in passenger volumes reflecting increased
capacity year-over-year. This increase was partly offset by a decrease in aircraft sublease revenues which was mainly due to
less aircraft being subleased to third parties compared to 2009, as well as the unfavourable impact of a stronger Canadian
dollar on U.S. currency denominated aircraft lease and sublease revenues.
CASM decreased 3.1% from 2009. Excluding fuel expense, CASM decreased 4.5% from 2009
In 2010, operating expenses of $10,425 million increased $370 million or 4% from 2009. The increase in operating expenses
in 2010 was largely driven by the capacity growth of 7.0%, higher base fuel prices year-over-year, and increases in wages,
salaries and benefits, commissions, ownership, and communication and information technology costs from 2009. Higher
credit card fees and an increase in expenses related to ground packages at Air Canada Vacations were also contributing
factors to the operating expense increase year-over-year.