Air Canada continues its strategy of higher capacity growth to fuel rapid international growth

Air Canada's yield and passenger unit revenues during 3Q2016 remained broadly in line with those of the previous quarter, which is a different outcome from the results posted by many of its North American peers. However its top line revenues grew nearly 11%, and its costs fell at a lower rate than those of many other North American airlines.

The airline's yields and passenger unit revenues began falling earlier than those of most other airlines based in North America, and Air Canada's recurring explanation is that lower yields and unit revenues are an expected byproduct of changes in its business model - the creation of its low cost unit rouge, a higher mix of lower-yielding leisure travellers, and longer average stage lengths. As yields and unit revenues continue to decline, Air Canada continues to deliver on its own established financial goals for EBITDAR, ROIC and leverage ratios.

Air Canada's focus has been on international expansion during the past few years, and that trend will continue for the foreseeable future. In 2017 the airline is expecting nine Boeing 787s scheduled for delivery and its capacity is likely to mirror 2016's double-digit growth - given that the company will accept delivery of nine new widebodies this year. The bulk of its growth will again be directed to international routes as several new long haul markets are scheduled to come online in 2017.