Air Canada's operating revenues rose 2.5 percent year over
year to 5.6 billion Canadian dollars despite lower capacity due to the
grounding of its Boeing 737 Max aircraft.
In an earnings call, EVP and chief commercial officer Lucie
Guillemette said strong business travel demand was partly to thank for the
revenue growth. Overall, passenger revenue from the business cabin was up 3.9
percent year over year, she said. Asked by an analyst why that increase was
smaller than recent quarters, Guillemette noted "a material decline"
in business travel on routes to China and Hong Kong but that the carrier's
premium cabins are performing well on other key routes.
Revenue on U.S. transborder routes was up 5.6 percent year
over year on premium cabin growth, and domestic revenue was up 8.6 percent year
over year, she said.
Air Canada's capacity was down 2.1 percent year over year
during the quarter, and traffic was down 1.8 percent. Load factor was up 0.2
percentage points to 86.1 percent, and yield was up 4.8 percent year over year.
The Max grounding removed 36 aircraft, about 24 percent of
Air Canada's narrow-body fleet, from its peak summer schedule, president and
CEO Calin Rovinescu said. While the carrier was able to cover 95 percent of its
planned flying during the quarter, through such methods as deferring
nonessential aircraft maintenance and wet-leasing a few extra aircraft, it has
"exacted a toll from a financial, route, product and human resources
perspective," Rovinescu said. "There's no doubt the grounding is
preventing us from realizing our full potential."
Air Canada has removed the Max from its schedule until Feb.
14.
Next month, Air Canada will begin the implementation of a
new passenger services system, part of the Amadeus Altea suite, as it
transitions away from its in-house system. It first will be moving reservation inventory
and ticketing to Altea, and next year, it will introduce it at airports for
departure control.
The new system will make it easier for Air Canada to sell
upgrades, introduce more ancillaries and do more frequent schedule changes,
Guillemette said. It also will allow Air Canada to be better synced with its
Star Alliance partners, many of which are already on the Altea system, she
said.
Air Canada reported a net income of 636 million Canadian
dollars for the quarter, down from 702 million Canadian dollars in the third
quarter of 2018.
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