Air Canada 2013 Annual Report Download - page 31

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2013 Management’s Discussion and Analysis
31
In the fourth quarter of 2013, Air Canada’s system capacity was 3.5% higher than in the fourth quarter of 2012, with capacity
growth reflected in all markets.
Components of the year-over-year change in fourth quarter system passenger revenues included:
• The 2.5% traffic increase which reflected traffic growth in all markets.
• The 0.6% yield decrease which reflected yield declines in the domestic and Pacific markets partly offset by yield growth
in the U.S. transborder, Atlantic and Other markets. The impact of a higher proportion of longer-haul flying in the fourth
quarter of 2013 was also a contributing factor in the yield decline year-over-year. A favourable foreign currency impact of
$24 million partly offset the yield decrease.
The 1.7% RASM decrease was due to a passenger load factor decline of 0.9 percentage points and the yield decrease of 0.6%.
RASM declines were recorded in all markets with the exception of the U.S. transborder and Other markets.
Domestic passenger revenues decreased 1.1% from the fourth quarter of 2012
In the fourth quarter of 2013, on capacity growth of 3.2%, domestic passenger revenues of $1,040 million decreased
$11 million or 1.1% from the fourth quarter of 2012. The decrease in domestic passenger revenues was due to a yield decline
of 3.6% partly offset by traffic growth of 2.6%.
The table below provides year-over-year percentage changes in domestic passenger revenues and operating statistics for the
fourth quarter 2013 and each of the previous four quarters.
Canada Year-over-Year by Quarter (% Change)
Q4'12 Q1'13 Q2'13 Q3'13 Q4'13
Passenger revenues 7.2 1.5 3.1 2.1 (1.1)
Capacity (ASMs) 0.1 (0.6) 3.1 2.3 3.2
Traffic (RPMs) 3.3 1.8 3.0 1.7 2.6
Passenger load factor
(pp change) 2.6 2.0 – (0.5) (0.4)
Yield 3.9 (0.1) 0.1 0.5 (3.6)
RASM 7.3 2.3 – – (4.1)
In the fourth quarter of 2013, domestic capacity growth of 3.2% reflected capacity increases on transcontinental routes,
linking Toronto, Montreal and Ottawa with major western Canadian cities, and on routes within western Canada and to the
Maritimes.
Components of the year-over-year change in fourth quarter domestic passenger revenues included:
• The 2.6% 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.
• The 3.6% yield decrease which reflected yield declines on all major domestic services, reflecting increased industry
capacity and competitive pricing activities.
Domestic RASM decreased 4.1% from the fourth quarter of 2012.
U.S. transborder passenger revenues increased 8.1% from the fourth quarter of 2012
In the fourth quarter of 2013, on a capacity growth of 1.6%, U.S. transborder passenger revenues of $523 million increased
$39 million or 8.1% from the fourth quarter of 2012. The increase in U.S. transborder passenger revenues was due to yield and
traffic growth of 4.2% and 4.0%, respectively.