Air Canada 2013 Annual Report Download - page 22

2013 Air Canada Annual Report
22
Domestic passenger revenues increased 1.4% from 2012
In 2013, on a capacity increase of 2.0%, domestic passenger revenues of $4,237 million increased $59 million or 1.4% from
2012. The increase in domestic passenger revenues was mainly due to traffic growth of 2.3%. The 2.0% capacity increase
reflected capacity growth on all major domestic services with the exception of routes within Ontario and Quebec. While
overall domestic market capacity increased starting in May 2013, regional competitive pressures mainly increased in the
fourth quarter of 2013.
Components of the year-over-year change in full year domestic passenger revenues included:
• The 2.3% traffic increase which reflected traffic growth on all major domestic services with the exception of regional
routes within Ontario and Quebec where capacity was reduced year-over-year.
• Domestic yield decreased 0.8% which reflected declines on all major domestic routes with the exception of
transcontinental routes, linking Toronto, Montreal and Ottawa with major western Canadian cities, and on routes within
western Canada. RapidairTM routes, linking Toronto and Montreal/Ottawa, regional routes within Ontario and Quebec, and
routes to the Maritimes were impacted by increased industry capacity and aggressive pricing activities.
The 0.5% RASM decrease was due to the yield decline of 0.8% partly offset by a 0.2 percentage point improvement in
passenger load factor. RASM improvements were recorded on all major domestic services with the exception of regional
routes within Ontario and Quebec and on routes within western Canada.
U.S. transborder passenger revenues increased 2.1% from 2012
In 2013, with capacity essentially unchanged from 2012, U.S. transborder passenger revenues of $2,176 million increased
$46 million or 2.1% from 2012. The increase in U.S. transborder passenger revenues was mainly due to traffic growth of 1.7%
and an increase in baggage fee revenues year-over-year (baggage fee revenues are not included in Air Canada’s yield and
RASM results).
Components of the year-over-year change in full year U.S. transborder passenger revenues included:
• The traffic increase of 1.7% which reflected traffic growth on all major U.S. transborder services with the exception of
certain services, such as western Canada-western U.S. and Hawaii, where capacity was reduced year-over-year.
• A year-over-year increase in baggage fee revenues.
• The 0.1% yield increase which reflected yield growth on U.S. long-haul routes and on routes to Florida and Hawaii, which
was largely offset by the impact of increased industry capacity and aggressive pricing activities on U.S. short-haul routes,
such as Boston, New York and Washington, D.C., as well as the impact of a higher proportion of longer-haul flying when
compared to 2012. A favourable foreign currency impact of $11 million in 2013 was a contributing factor in the yield
improvement year-over-year.
The 1.9% RASM increase was mainly due to a 1.4 percentage point improvement in passenger load factor. RASM
improvements were recorded on all major U.S. transborder services with the exception of U.S. short-haul routes where RASM
remained at 2012 levels.
Atlantic passenger revenues increased 7.1% from 2012
In 2013, on a capacity increase of 2.0%, Atlantic passenger revenues of $2,263 million increased $149 million or 7.1% from
2012 due to yield and traffic growth of 5.0% and 2.1%, respectively. The capacity growth of 2.0% reflected capacity increases
on all major Atlantic services with the exception of Spain, Greece and Switzerland.