Canadian airlines report improved loads

CANADA’s largest two airlines – Air Canada and WestJet Airlines – reported better loads in June compared to a year ago.

Air Canada’s load factor rose to 85.6 per cent from 84.2 per cent a year ago when the airline suffered a strike by customer service agents. However, the improvement was also due to the increased passenger traffic by 1.5 per cent while at the same time the airline had trimmed capacity by 0.1 per cent.

In the same vein, WestJet’s improved load factor from 75.7 per cent to 79.0 per cent was the result of passenger traffic increase by 6.7 per cent outpacing capacity increase by 2.3 per cent.

Adjusting supply to better reflect the market’s demand has been a strategy that many airlines usually resort to in a sluggish market. As the industry continues to face uncertainty globally, the real stability test is in the months to come after the summer peak travel season. However, WestJet president and CEO Gregg Saretsky expressed confidence of the positive trend continuing. He said: “Advanced bookings for July and August remain strong.”

Air Canada president and chief executive Calin Rovinescu too was confident about the airline achieving its first profit in years, although the airline last reported a net loss for the quarter ending March 31 of C$210 million (US$207 million), which was 11 times higher than the C$19 million loss in 2011. He said the record load factor for June was the result of a “strategy to manage capacity to ensure high efficiency.” Indeed, the keyword is “efficiency”. Hopefully Air Canada’s labour problems are a thing of the past.

Canada’s regional carrier Porter Airlines, however, saw its June load factor dropping from 64.6 per cent to 62.0 per cent, but the airline maintained that the numbers “met our expectations”. This was because the higher number last year benefitted from a strike by workers at Air Canada. Also, while traffic grew 4.1 per cent, capacity went up higher by 8.5 per cent.

But all is not rosy for charter airline Air Transat, which posted a second quarterly loss of C$26.2 million. This would reduce the operator’s hope of returning to profitability this year, as the company’s president Jean-Marc Eustache admitted: “It doesn’t look like it’s happening, is it?” Mr Eustache is now eyeing Asia as the European market continues to lose its lustre. This would be in competition with Air Canada, which has already announced plans for a low-cost carrier to the region. But Mr Eustache insisted that Air Transat is a tour operator, not an airline.

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About David Leo
David Leo has more than 30 years of aviation experience, having served in senior management in one of the world's best airlines and airports. He continues to maintain a keen interest in the business, writes freelance and provides consultancy services in the field.

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