Air Canada 2014 Annual Report Download - page 24

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24 2014 Annual Report
SYSTEM PASSENGER REVENUES INCREASED 7.1% FROM 2013
In 2014, on capacity growth of 7.8%, system passenger revenues of $11,804 million increased $783 million
or 7.1% from 2013. This increase was mainly due to traffic growth of 8.5% partly offset by a yield decline of
1.3%. Modest yield declines are an anticipated and natural consequence of the successful implementation of
Air Canada’s business strategy to profitably increase long-haul international and leisure flying.
In 2014, system business cabin revenues increased $109 million or 4.9% from 2013 due to a yield improvement.
The table below provides passenger revenue by geographic region for 2014 and 2013.
2014
$ MILLION
2013
$ MILLION
CHANGE
$ MILLION % CHANGE
PASSENGER REVENUE
Canada 4,381 4,237 144 3.4
U.S. transborder 2,379 2,176 203 9.4
Atlantic 2,554 2,263 291 12.8
Pacific 1,710 1,618 92 5.6
Other 780 727 53 7.3
SYSTEM 11,804 11,021 783 7.1
The table below provides year-over-year percentage changes in passenger revenues and operating statistics for
2014 versus 2013.
PASSENGER
REVENUE
% CHANGE
CAPACITY
(ASMS)
% CHANGE
TRAFFIC
(RPMS)
% CHANGE
PASSENGER
LOAD
FACTOR
PP CHANGE
YIELD
% CHANGE
PRASM
% CHANGE
FULL YEAR 2014 VERSUS FULL YEAR 2013
Canada 3.4 4.8 5.3 0.4 (2.3) (1.8)
U.S. transborder 9.4 9.8 13.1 2.4 (2.8) 0.1
Atlantic 12.8 14.3 13.6 (0.5) (0.6) (1.1)
Pacific 5.6 4.3 4.6 0.3 1.3 1.7
Other 7.3 3.3 5.7 1.9 2.1 4.5
SYSTEM 7.1 7.8 8.5 0.6 (1.3) (0.6)
In 2014, Air Canada’s system capacity was 7.8% higher than in 2013, with capacity growth reflected in all
markets.
Components of the year-over-year change in system passenger revenues included:
• The 8.5% traffic increase which reflected traffic growth in all markets. Consistent with the airline’s objective
of increasing global international-to-international connecting traffic through its major Canadian hubs, the
traffic growth in 2014 also reflected incremental connecting traffic to international destinations.
• The 1.3% yield decrease which was the result of an increase in average stage length of 2.3%, which had the
effect of reducing system yield by 1.3 percentage points, the impact of higher proportional growth of lower-
yielding international-to-international passenger flows in support of the airline’s international expansion
strategy, a higher proportion of seats into long-haul leisure markets, and the use of lower-cost Boeing 777
high-density aircraft which have a larger economy cabin. On a stage length adjusted basis, system yield was
unchanged from 2013. These decreases were offset by a favourable currency impact of $208 million and
improvements in Air Canada’s business cabin revenue performance.