- Passenger numbers: 7.4 million, -0.8%;
- Aircraft movements: 54,671, -5.0%;
Hochtief pax numbers down 0.8% in Mar-2011
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Air Canada bulks up capacity for the high season as long term labour stability improves
Air Canada continues to hold a positive outlook for the North American summer high season since the bulk of its capacity is pegged to international markets, including long haul trans-Atlantic and trans-Pacific routes. International expansion remains the airline’s most important priority as it is attempting to build a long haul network that rivals its large global airline counterparts in the US.
The airline also continues to drive sixth freedom traffic flows from the US, with the goal of doubling its market share among those passengers over the next couple of years. Air Canada has also subtly capitalised on the anti-Trump sentiment in the US by creating a smart campaign urging US citizens to “test drive” Canada before picking up and moving to the country.
Counter to some large US airlines that are facing tough labour negotiations, Air Canada is enjoying a period of employee stability as all of its major labour groups are now under long-term contracts. The longevity of those agreements allows Air Canada a degree of certainty in labour expense that some of its US peers do not enjoy.
Air Canada's outlook lifted by slowing domestic capacity as it works to maximise fleet flexibility
Air Canada believes that changes it is making to business strategy – aircraft densification and the expansion of its low cost subsidiary, rouge – are positioning the airline to weather uncertain economic conditions in Canada and in other geographical regions.
A decline in industry domestic capacity later in 2016 should benefit Air Canada and rival WestJet, but Air Canada’s yields will continue to decline because certain components of its strategy blueprint – longer stage length and a higher proportion of leisure travellers – dictate a decrease in yields.
Although Air Canada has ceased offering capacity guidance, most of its planned expansion of supply in 2016 is pegged for international markets as it works to craft a global network that rivals that of its large North American peers. Perhaps to reassure investors that it is prepared to act rationally if conditions suddenly worsen, Air Canada is stressing the flexibility it retains to adjust its fleet and redeploy capacity from underperforming markets to other regions of its network.