Air Canada 2014 Annual Report Download - page 26

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26 2014 Annual Report
density aircraft which have a larger economy
cabin, as well as new and increased lower-
cost flying by Air Canada rouge which offers a
Premium rouge product but has no international
business cabin. These yield decreases were largely
offset by improvements in Air Canada’s business
cabin revenue performance, an increase in
premium economy traffic which resulted in higher
average fares, and a favourable currency impact of
$82 million.
The 1.1% PRASM decrease was due to the yield
decline and a 0.5 percentage point decrease in
passenger load factor.
PACIFIC PASSENGER REVENUES
INCREASED 5.6% FROM 2013
In 2014, on capacity growth of 4.3%, Pacific
passenger revenues of $1,710 million increased
$92 million or 5.6% from 2013 due to traffic and yield
growth of 4.6% and 1.3%, respectively.
Components of the year-over-year change in Pacific
passenger revenues included:
• The 4.6% traffic increase which reflected traffic
growth on services to Hong Kong, Japan and
Australia where capacity was increased year-over-
year partly offset by traffic decreases on services
to Korea and China where capacity was reduced
year-over-year.
• The 1.3% yield increase which reflected yield
growth on all Pacific services with the exception
of Hong Kong, a strong yield performance on
services to Korea, China and Australia and, to a
lesser extent, Japan, improvements in the airline’s
business cabin revenue performance, growth
in premium economy traffic which resulted in
higher average fares, and a favourable currency
impact of $36 million. With respect to the airline’s
services to Hong Kong, Air Canada operates a
lower-cost Boeing 777 higher-density aircraft on
its Vancouver-Hong Kong route which has a larger
economy cabin. The use of this lower-cost aircraft
on high-volume routes, such as Vancouver-Hong
Kong, is allowing the airline to access traditionally
lower-yielding traffic while improving profitability
of the routes.
The 1.7% PRASM increase was due to the higher
yield and to a passenger load factor improvement of
0.3 percentage points.
OTHER PASSENGER REVENUES
INCREASED 7.3% FROM 2013
In 2014, on a capacity increase of 3.3%, Other passenger
revenues (comprised of routes to the Caribbean, Mexico
and Central and South America) of $780 million increased
$53 million or 7.3% from 2013 due to traffic and yield
growth of 5.7% and 2.1%, respectively.
Components of the year-over-year change in Other
passenger revenues included:
• The overall 5.7% traffic increase which reflected
traffic growth on all major services in the Other
markets with the exception of South America
where capacity was reduced year-over-year.
• The overall 2.1% yield increase which reflected
yield growth on the airline’s routes to Mexico
and to traditional sun destinations on higher
average fares and a favourable currency impact
of $14 million. These yield increases were
partly offset by a yield decline on services to
South America, in large part due to the airline’s
suspension of service to Venezuela.
The 4.5% PRASM increase was due to the yield
growth and a 1.9 percentage point improvement in
passenger load factor. PRASM improvements were
recorded on all major services in the Other markets.