Air Canada 2011 Annual Report Download - page 27

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2011 Management’s Discussion and Analysis
27
In the fourth quarter of 2011, the growth in capacity year-over-year was mainly due to extended operations on summer
seasonal routes, including Greece, Spain, Italy and St. John’s, Newfoundland to London. Additional frequencies to Brussels and,
the use of larger aircraft on routes to Germany also contributed to the capacity growth.
Components of the year-over-year change in fourth quarter Atlantic passenger revenues included:
The traffic increase which reflected growth on all major Atlantic services, with the exception of routes to the United
Kingdom. Traffic on routes to the U.K. continued to be challenged by the weak economic environment in the U.K. and
additional competitive pricing actions, impacting both local traffic and connecting markets over Air Canada’s London
gateway. The traffic gains did not meet the capacity growth, resulting in a lower passenger load factor.
The adjusted yield decline which was due in part to the impact of increased competitive activities and continued weak
economic conditions in Europe, especially in some of our core markets; UK, France, and Germany. Approximately 30% of
our Atlantic revenues are generated from point of sale Europe.
The adjusted RASM decline was due to the lower yield and passenger load factor.
Pacific passenger revenues increased 6.9% from the fourth quarter of 2010
Pacific passenger revenues of $279 million in the fourth quarter of 2011 increased $18 million or 6.9% from the fourth
quarter of 2010, mainly due to yield and traffic growth.
The table below provides year-over-year percentage changes in Pacific passenger revenues and operating statistics for the
fourth quarter 2011 and each of the previous four quarters.
Pacific Year-over-Year by Quarter (% Change)
Q4'10 Q1'11 Q2'11 Q3'11 Q4'11
Passenger Revenues 31.7 17.0 6.4 5.8 6.9
Capacity (ASMs) 23.0 21.5 7.2 2.0 1.4
Traffic (RPMs) 22.9 16.0 5.9 1.5 1.6
Passenger Load Factor
(pp Change) (0.1) (4.0) (1.1) (0.5) 0.1
Yield 7.2 0.7 0.4 4.2 4.7
RASM 7.0 (3.9) (0.8) 3.6 4.9
In the fourth quarter of 2011, the increase in Pacific capacity mainly reflected a capacity increase on routes to Korea.
Components of the year-over-year change in fourth quarter Pacific passenger revenues included:
The traffic increase which reflected growth on routes to China and Korea. The traffic growth was slightly higher than the
capacity growth, resulting in a higher passenger load factor.
The yield increase which reflected growth on all major Pacific services. The yield growth was due to fare improvements,
gains in premium cabin traffic, and to increased fuel surcharges to partly offset higher fuel prices.
The RASM improvement was mainly due to stronger yields on routes to China.