Did you know that many of today’s most successful ULCCs fly out of primary airports while continuing to offer ultra low fares to their passengers? More travel and exploration are possible because of this!
Which ULCC’s you ask? Well, we’re talking about Spirit, easyJet, RyanAir, Vueling, Viva Aerobus, and AirAsia – to name a few.
We hear you Canada – convenience to get to and from the airport is important! But so is price. And we achieve both low-cost travel wishes by making YVR (Vancouver) home (above).
We can’t wait to welcome you onboard in the future.
The airline also issued this statement:
Jetline is pleased to announce that it has chosen Vancouver International Airport (YVR) to be its home airport and primary base of operations when it begins flight operations targeted for later this year. Jetlines has filed and received confirmation from YVR that all airport slots needed to operate their initial network using their first two Airbus A320 aircraft will be available.
Jetlines selected YVR as their future base for operations due to it being the second busiest airport in Canada, serving more than 25.9 million passengers in 2018. It is also the busiest airport in British Columbia and the airport with the largest catchment area. The airport has more than 2.5 million people living less than 30 minutes drive from it. As well as it being the closest airport to Vancouver’s city center, the airport is also extremely well connected to the city by transit with a rapid transit rail.
In addition to the desirable location and facilities, Jetlines was attracted to YVR due to their competitive rates and charges. The airport’s ConnectYVR program provides airlines a standard rate structure for landing and terminal fees. This program rewards airlines for efficiency and growing their services at YVR providing further incentive for Jetlines to build their base of operations out of Vancouver.
CEO Javier Suarez stated “I am extremely excited to be able to use Vancouver International Airport as our primary base of operations once we launch. The Greater Vancouver area population, cost to operate from the airport, and transit accessibility, linked with the enormous tourist attraction that Vancouver has, provides Jetlines with a massive business opportunity. Having launched more than 300 routes in my career with most of them out of primary airports, I have no doubt that the Vancouver Airport will offer Jetlines the opportunity to launch and profitably operate a large number of routes.”
“We welcome the news that Jetlines is planning to use YVR as their base of operations once they launch. It is great to hear that this Canadian-operated airline is making positive progress to begin offering service. We are excited that Jetlines intends to offer flights from YVR across Canada and to several sun destinations as this will provide added choice for our passengers in the future,” said Anne Murray, Vice President, Airline Business Development and Public Affairs, Vancouver Airport Authority.
The Company’s ability to service this airport is subject to the completion of the airline licensing process and the receipt of applicable regulatory approvals.
The prospective airline also announced it intends to provide ultra-low fare service from both the Kelowna International Airport (YLW) and the Winnipeg James Armstrong Richardson International Airport (YWG).
WestJet also announced that it has again enhanced its schedule and connectivity out of its Vancouver hub to key business and leisure destinations in Canada and Mexico, adding 60 more flights weekly.
Details of WestJet’s increased service from Vancouver:
An increase of 24 weekly flights between Vancouver and Calgary for a total of 16 times daily, with hourly service in both directions (top of the hour from Vancouver, and bottom of the hour from Calgary).
Vancouver-Edmonton from 50 to 59 times weekly (nine times each business day).
Vancouver-Calgary, from 88 to 112 times weekly (16 times daily).
Vancouver-Kelowna from 40 to 49 times weekly (seven times daily).
Vancouver-Ottawa from seven to 14 times weekly (twice daily).
Vancouver-Regina from six to seven times weekly (daily).
Vancouver-Fort St. John from six to 12 times weekly.
Vancouver-Victoria from 33 to 35 times weekly (five times daily).
Vancouver-Cancun, from two to three times weekly.
Vancouver-Cabo San Lucas from one to two times weekly.
As previously announced, on March 15, WestJet will launch three-time weekly service between Vancouver and Mexico City with the route moving to daily service on April 29.
Copyright Photo: WestJet Airlines Boeing 737-8CT SSWL C-GWSV (msn 37158) (Walt Disney World – Frozen) YVR (Rob Rindt). Image: 934210.
Air North, Yukon’s Airline has announced an addition to its route network to include twice weekly scheduled Boeing 737 jet service between Whitehorse, Yukon and Victoria, British Columbia. The new service will commence on May 18, 2018.
For a number of years, Air North, Yukon’s Airline has been providing Yukoners direct access to Victoria on its popular Thanksgiving weekend charter and other, one-off flights. The addition of Victoria to its regular schedule reflects the strong demand Yukoners have shown for the destination.
This route expansion follows the successful launch of scheduled service to Kelowna in 2013 and Yellowknife and Ottawa in 2014, demonstrating the company’s continued commitment to providing affordable outbound air travel for Yukoners and expanding inbound access for visitors, business travelers, friends and family.
The inaugural Victoria schedule has Monday and Friday afternoon departures from Whitehorse. Friday’s flight is direct to Victoria, returning to Whitehorse via Kelowna. Monday’s flight sees a brief stop in Kelowna for Victoria-bound passengers with direct return service to Whitehorse.
Copyright Photo: Air North-Yukon’s Airline (Canada) Boeing 737-505 WL C-GANH (msn 27153) YVR (Steve Bailey). Image: 924540.
WestJet on November 24, 2017 introduced WestJet Link, a new regional air service operating under a capacity purchase agreement (CPA) with Pacific Coastal Airlines.
Using Pacific Coastal Airlines’ aircraft painted in WestJet colors, WestJet Link will connect the communities of Lethbridge, Lloydminster, Medicine Hat, Cranbrook and Prince George to WestJet’s rapidly expanding network hub at the Calgary International Airport (YYC). These new routes will add to WestJet’s existing leadership position in Calgary, offering more flights and seats to more destinations than any other airline.
All WestJet Link flights will be operated by Pacific Coastal using its fleet of 34-seat Saab 340B aircraft. Each aircraft will include six seats available in WestJet Plus, offering guests advanced boarding, no-charge for two checked bags and seating at the front of the aircraft.
Details of WestJet’s new year-round nonstop service:
Calgary – Lethbridge
March 7, 2018
Calgary – Lloydminster
March 14, 2018
Calgary – Medicine Hat
May 31, 2018
Calgary – Cranbrook
March 7, 2018
Calgary – Prince George
March 14, 2018
Reduced frequency on weekends and some holidays
Introductory one-way fares to/from Calgary are available starting from:
Air transportation charges (ATC)
Book by December 4, 2017 (11:59 p.m. MT) for travel between March 7 & June 27, 2018. For Medicine Hat travel from May 31 – June 27, 2018. Blackout dates apply. Visit westjet.com/flight-schedules-new for more information.
For today only, connecting one-way fares to/from Toronto are available at special prices with limited quantities for the new additions to the WestJet network:
Air transportation charges (ATC)
Book by November 24, 2017 (11:59 p.m. MT) for travel between March 7 & June 27, 2018. For Medicine Hat travel from May 31 – June 27, 2018. Blackout dates apply. Visit westjet.com/flight-schedules-new for more information.
Pacific Coastal Airlines
A privately owned, British Columbia-based regional airline operating from Vancouver International Airport’s South Terminal (YVR), Pacific Coastal is the third largest airline at YVR in annual takeoffs and landings. It flies to 15 airports and connects to more than 50 destinations in the province, from as far east as Cranbrook in the Rocky Mountains and as far north as Prince George and Masset on the legendary island of Haida Gwaii.
Top Copyright Photo: Pacific Coastal SAAB 340 aircraft will now adopt the WestJet livery. Pacific Coastal Airlines (Pacific Coastal.com) SAAB 340A C-GCPU (msn 140) (diver) YVR (Ton Jochems). Image: 912125.
WestJet Airlines (Calgary) has announced an additional 55 weekly nonstop flights this winter from Toronto Pearson International Airport to key domestic business destinations as well as popular sun spots in the U.S., Mexico and the Caribbean. The service is part of the airline’s seasonal schedule for the winter of 2017-18.
Details of WestJet’s increased service from Toronto:
Toronto–Montreal, from 83 to 91 times weekly (14 times each business day).
Toronto–Ottawa, from 77 to 85 times weekly (13 times each business day).
Toronto–Vancouver, from 45 to 52 times weekly (eight times each business day).
Toronto–Calgary, from 56 to 68 times weekly, more than any other carrier (10 times each business day).
Toronto–Winnipeg, from 31 to 38 times weekly (six times each business day).
Toronto–Kelowna, from five to seven times weekly.
Toronto–Orlando, from 12 to 15 times weekly.
Toronto–Fort Lauderdale/Hollywood, from 11 to 14 times weekly.
Toronto–Cancun, from 11 to 15 times weekly.
Toronto–Montego Bay, from 13 to 14 times weekly.
Toronto–Nassau, from seven to nine times weekly.
Toronto–Liberia, from four to five times weekly.
Toronto–Antigua, from two to three times weekly.
Toronto–Punta Cana, from six to seven times weekly.
Toronto-Puerto Plata, from five to six times weekly.
WestJet also announced the addition of dozens of new flights across Canada. The additional flights deliver optimized service for both the business and leisure traveller and give Canadians greater connectivity into and out of WestJet hubs in Vancouver, Calgary and Toronto, providing more flight frequency between key routes, better scheduling and greater access from smaller airports into the wider WestJet network.
Highlights of WestJet’s 2017-18 winter schedule include:
New nonstop weekly service from Calgary to Belize City, Belize.
New nonstop weekly service from Edmonton and Vancouver to Huatulco.
Service from both Regina and Abbotsford to Puerto Vallarta will increase by one weekly flight for a total of twice weekly.
Additional flights from Edmonton to a number of domestic and international destinations including Cancun, Abbotsford and Victoria.
Additional flights from Calgary to a number of sun destinations including Cancun, Cabo San Lucas, Los Angeles, Phoenix, Palm Springs and Puerto Vallarta.
Additional flights from Calgary to a number of domestic destinations including Kitchener, Fort McMurray, Grande Prairie, Kelowna and Brandon.
Additional flights from Vancouver to a number of domestic and international destinations including Cancun, Puerto Vallarta, Fort St. John, Calgary, Edmonton and Fort McMurray.
Extension of existing summer service increases through the winter including three daily flights between Toronto and Moncton, six daily flights between Edmonton and Kelowna and 12 weekly flights between Calgaryand Houston.
This winter WestJet will operate an average of 700 daily flights to 93 destinations including 37 in Canada, 22 in the United States, 33 in Mexico, the Caribbean and Central America and one in Europe.
Copyright Photo: WestJet Airlines Boeing 737-8CT SSWL C-GWSZ (msn 37092) (Walt Disney World – Magic Plane) YVR (Steve Bailey). Image: 936503.
Air Canada (Montreal) has announced a further, strategic expansion of its Vancouver hub with the addition of the only nonstop flights to Dublin, Ireland next summer. This new seasonal route follows the recent announcement of several enhancements at the airline’s Vancouver hub for 2016, including new transborder services to Chicago, San Jose and San Diego, double daily flights to London Heathrow, and the only flights linking Canada to Brisbane, Australia. The Vancouver-Dublin flights will be operated three times weekly by Air Canada’s leisure airline, Air Canada rouge, with Boeing 767-300 ER aircraft beginning June 10, 2016.
This year to date, Air Canada has launched new international services from Montreal-Venice, Montreal-Mexico City, Toronto-Amsterdam, Toronto-Dubai, Toronto-Delhi and Vancouver-Osaka.
Next summer, Air Canada will be launching new international services from Montreal-Casablanca, Montreal-Lyon, Toronto-Prague, Toronto-Budapest, Toronto-Glasgow, Toronto-London Gatwick, Toronto-Warsaw, Toronto-Seoul, Vancouver-Brisbane and Vancouver-Dublin.
Copyright Photo: Chris Sands/AirlinersGallery.com. Boeing 767-333 ER C-FMWV (msn 25586) lands at Vancouver International Airport.
Air Canada (Montreal) reported record second quarter adjusted net income of $250 million (1) (all amounts are reported in Canadian dollars) or $0.85 per diluted share compared to adjusted net income of $139 million or $0.47 per diluted share in the second quarter of 2014, an improvement of $111 million or approximately 80 percent. EBITDAR(1) (earnings before interest, taxes, depreciation, amortization and aircraft rent) amounted to $591 million compared to EBITDAR of $456 million in the same quarter in 2014, an increase of $135 million or approximately 30 per cent year-over-year. The airline recorded an EBITDAR margin of 17.3 per cent compared to an EBITDAR margin of 13.8 per cent in the second quarter of 2014, an improvement of 3.5 percentage points. On a GAAP basis, Air Canada reported record second quarter operating income of $323 million compared to operating income of $245 million, an improvement of $78 million or approximately 32 per cent from the second quarter of 2014. An operating margin of 9.5 per cent in the second quarter of 2015 reflected an improvement of 2.1 percentage points from the same quarter in 2014.
“We again expect to deliver record results in the third quarter, with EBITDAR margin expansion versus prior year higher than the 350 basis point expansion recorded in the second quarter. Demand continues to be robust moving into, historically, our most important quarter given the travel demands and patterns of our North American customers. Our capacity additions for the year, which are largely in our international markets, are important contributors to our increased profits and remain consistent with our plan established in a higher fuel price environment. Our plan is not dependant or conditional on fuel prices staying at the current levels; and the transformative changes we have made over the last several years provide us with the cost structure, fleet and flexibility to respond not only to increased competition in any of our key markets, but also to weaknesses in the Canadian dollar or a downturn in the economy. If we see demand weakening, we can adjust quickly. We are building a resilient airline for the long-term, a sustainably profitable company and global industry leader,” said Mr. Rovinescu.
Second Quarter Income Statement Highlights
In the second quarter of 2015, on capacity growth of 9.3 per cent, system passenger revenues of $3.082 billion increased $117 million or 3.9 per cent from the second quarter of 2014. Traffic growth of 8.7 per cent reflected traffic increases in all of Air Canada’s five geographic markets. A yield decline of 5.0 per cent, consistent with the anticipated yield impact stemming from the implementation of the airline’s strategic plan, reflected an increase in average stage length of 3.4 per cent, which had the effect of reducing system yield by 1.9 percentage points, a higher proportional growth of lower-yielding international-to-international passenger flows in support of the airline’s international expansion strategy, a higher proportion of seats into long-haul leisure markets, and a reduction in carrier surcharges relating to lower fuel prices, particularly where carrier surcharges are regulated. The favourable impact of a weaker Canadian dollar on foreign currency denominated passenger revenues increased passenger revenues by approximately $61 million in the second quarter of 2015. Passenger revenue per available seat mile (PRASM) decreased 5.5 per cent from the second quarter of 2014 on the lower yield and, to a much lesser extent, a passenger load factor decline of 0.5 percentage points.
In the second quarter of 2015, operating expenses of $3.091 billion increased $31 million or 1.0 per cent from the second quarter of 2014 on the capacity growth of 9.3 per cent. The increase in operating expenses reflected the impact of the weaker Canadian dollar and capacity-related cost increases largely offset by the impact of lower jet fuel prices. The second quarter of 2015 included impairment charges of $14 million and favourable tax-related provision adjustments of $23 million while the second quarter of 2014 included favourable tax-related provision adjustments of $41 million (the impairment charges and tax-related provision adjustments are excluded from adjusted net income and adjusted CASM results). The unfavourable impact of a weaker Canadian dollar on foreign currency denominated operating expenses (mainly U.S. dollars) in the second quarter of 2015, when compared to the second quarter of 2014, increased operating expenses by approximately $134 million (comprised of $73 million in aircraft fuel expense and an aggregate of $61 million in non-fuel operating expenses).
Air Canada’s cost per available seat mile (CASM) decreased 7.6 per cent from the second quarter of 2014. The airline’s adjusted CASM(1), which excludes fuel expense, the cost of ground packages at Air Canada Vacations® and unusual items (such as the impairment charges and the tax-related provision adjustments discussed above) increased 0.7 per cent from the second quarter of 2014, in line with the 0.25 to 1.25 per cent increase projected in Air Canada’s news release dated May 12, 2015. Had the Canadian-U.S. dollar exchange rate remained at 2014 levels, adjusted CASM would have decreased 1.8 per cent when compared to the second quarter of 2014.
Financial and Capital Management Highlights
At June 30, 2015, unrestricted liquidity (cash, short-term investments and undrawn lines of credit) amounted to $3.283 billion (June 30, 2014 – $2.954 billion).
Adjusted net debt amounted to $4.896 billion at June 30, 2015, a decrease of $236 million from December 31, 2014 as higher cash and short-term investments balances more than offset the increase in long-term debt and finance lease balances (including current portion). The airline’s adjusted net debt to EBITDAR ratio was 2.3 at June 30, 2015 versus a ratio of 3.1 at December 31, 2014.
In the second quarter of 2015, net cash flows from operating activities totaled $509 million, an improvement of $123 million from the second quarter of 2014. Free cash flow(1) amounted to $299 million, $335 million higher than the second quarter of 2014. This increase reflected a decrease in capital expenditures of $212 million and the higher cash flows from operating activities.
For the 12 months ended June 30, 2015, return on invested capital (ROIC(1)) was 16.2 per cent versus 11.0 per cent for the 12 months ended June 30, 2014.
For the third quarter of 2015, Air Canada expects to deliver record results, with EBITDAR margin expansion versus prior year higher than the 350 basis point expansion recorded in the second quarter of 2015.
Air Canada expects third quarter 2015 system ASM capacity, as measured by available seat miles (ASMs), to increase 9.5 to 10.5 per cent when compared to the third quarter of 2014, and to be comprised of an increase in the total number of seats dispatched (system) of 6.5 to 7.5 per cent and an increase in system average stage length (measured by ASMs divided by seats dispatched) of approximately 3.0 per cent when compared to the same quarter in 2014.
Air Canada continues to expect its full year 2015 system ASM capacity to increase by 9.0 to 10.0 per cent. For the full year 2015, Air Canada continues to expect an increase in the total number of seats dispatched (system) of 6.0 to 7.0 per cent and an increase in average stage length (system) of approximately 3.0 per cent when compared to the full year 2014. Approximately 55 per cent of the 2015 forecasted capacity increase will be through the continued lower-cost growth of Air Canada rouge® while approximately 38 per cent of the capacity growth will be targeted to international markets operated by the mainline carrier.
Air Canada now expects its full year 2015 domestic ASM capacity to increase by 3.0 to 4.0 per cent when compared to 2014 as opposed to the 3.5 to 4.5 per cent increase projected in Air Canada’s May 12, 2015 news release, primarily the result of minor schedule changes. The year-over-year growth in full year 2015 domestic ASM capacity is largely focused on the airline’s transcontinental services, reflecting, in large part, the positioning of certain Boeing 777 and 787 aircraft at Air Canada’s major hubs in Toronto and Vancouver. Furthermore, in 2015, an overlap of the aircraft brought into the fleet to replace the exiting Embraer 190 aircraft is expected to account for approximately 30 per cent of the projected domestic capacity growth in 2015. This overlap is designed to better match capacity with expected 2015 summer season demand. For the full year 2015, Air Canada now expects an increase in the total number of seats dispatched (domestic) of 2.0 to 3.0 per cent and an increase in average stage length (domestic) of approximately 1.0 per cent when compared to the full year 2014.
For the third quarter of 2015, Air Canada expects adjusted CASM (which excludes fuel expense, the cost of ground packages at Air Canada Vacations and unusual items) to decrease by 0.5 to 1.5 per cent when compared to the third quarter of 2014.
For the full year 2015, Air Canada now expects adjusted CASM to decrease 1.0 to 2.0 per cent from the full year 2014 as opposed to the decrease of 1.5 to 2.5 per cent projected in Air Canada’s May 12, 2015 news release, reflecting, in large part, the impact of a weaker Canadian dollar on U.S. denominated operating expenses.
Air Canada’s outlook assumes relatively low Canadian GDP growth for 2015. Air Canada also expects that the Canadian dollar will trade, on average, at C$1.30 per U.S. dollar in the third quarter of 2015 and C$1.27 for the full year 2015 and that the price of jet fuel will average 62 cents per litre for the third quarter of 2015 and 64 cents per litre for the full year 2015.
For the full year 2015, Air Canada also expects:
Depreciation, amortization and impairment expense to increase by $125 million from the full year 2014 as opposed to the increase of $100 million projected in Air Canada’s May 12, 2015 news release. The increase in projected depreciation, amortization and impairment expense is largely driven by the impairment charges recorded in the second quarter of 2015.
Employee benefits expense to increase $30 million from the full year 2014 (as opposed to the increase of $50 million projected in Air Canada’s May 12, 2015 news release). The lower expected increase in employee benefits expense is primarily driven by benefit plan amendments relating to U.S. post-retirement health plans which reduced employee benefits expense by $19 million in the second quarter of 2015.
Aircraft maintenance expense to increase $90 million as opposed to the $120 million increase projected in Air Canada’s May 12, 2015 news release. The lower expected increase in aircraft maintenance expense is mainly driven by the timing of engine maintenance events when compared to 2014 and certain contract amendments.
(1) Non-GAAP Measures
Below is a description of certain non-GAAP measures used by Air Canada in order to provide readers with additional information on its financial and operating performance. Such measures are not recognized measures for financial statement presentation under Canadian GAAP and do not have standardized meanings and may not be comparable to similar measures presented by other public companies. Refer to Air Canada’s Second Quarter 2015 MD&A for reconciliation of non-GAAP financial measures.
Adjusted net income (loss) and adjusted net income (loss) per diluted share are used by Air Canada to assess the overall financial performance of its business without the effects of foreign exchange, net financing income (expense) relating to employee benefits, mark-to-market adjustments on fuel and other derivatives and unusual items as these items may distort the analysis of certain business trends and render comparative analysis to other airlines less meaningful. Air Canada also uses adjusted net income as a measure to determine return on invested capital.
EBITDAR is commonly used in the airline industry and is used by Air Canada to assess earnings before interest, taxes, depreciation, amortization, impairment and aircraft rent as these costs can vary significantly among airlines due to differences in the way airlines finance their aircraft and other assets.
Adjusted CASM is used by Air Canada to assess the operating and cost performance of its ongoing airline business without the effects of fuel expense, the cost of ground packages at Air Canada Vacations and unusual items, as such expenses may distort the analysis of certain business trends and render comparative analysis to other airlines less meaningful.
Free cash flow is used by Air Canada as an indicator of the financial strength and performance of its business because it shows how much cash is available for such purposes as repaying debt, meeting ongoing financial obligations and reinvesting in Air Canada.
Return on invested capital (ROIC) is used by Air Canada to assess the efficiency with which it allocates its capital to generate returns. Return is based on adjusted net income (loss) (as referred to in the paragraph above), excluding interest expense and implicit interest on operating leases. Invested capital includes average year-over-year total assets, net of average year-over-year non-interest-bearing operating liabilities, and the value of capitalized operating leases (calculated by multiplying annualized aircraft rent by 7).
Adjusted net income (loss) and adjusted net income (loss) per share – diluted are non-GAAP financial measures. Refer to section 16 “Non-GAAP Financial Measures” of Air Canada’s Second Quarter 2015 MD&A for additional information.
EBITDAR (earnings before interest, taxes, depreciation, amortization, impairment and aircraft rent) is a non-GAAP financial measure. Refer to section 16 “Non-GAAP Financial Measures” of Air Canada’s Second Quarter 2015 MD&A for additional information.
Unrestricted liquidity refers to the sum of cash, cash equivalents, short-term investments and the amount of available credit under Air Canada’s revolving credit facilities. At June 30, 2015, unrestricted liquidity was comprised of cash and short-term investments of $3,021 million and undrawn lines of credit of $262 million. At June 30, 2014, unrestricted liquidity was comprised of cash and short-term investments of $2,615 million and undrawn lines of credit of $339 million.
Free cash flow (cash flows from operating activities less additions to property, equipment and intangible assets) is a non-GAAP financial measure. Refer to section 7.5 “Consolidated Cash Flow Movements” of Air Canada’s Second Quarter 2015 MD&A for additional information.
Adjusted net debt (total debt less cash, cash equivalents and short-term investments plus capitalized operating leases) is an additional GAAP financial measure. Refer to section 7.3 “Adjusted Net Debt” of Air Canada’s Second Quarter 2015 MD&A for additional information.
Return on invested capital (“ROIC”) is a non-GAAP financial measure. Refer to section 16 “Non-GAAP Financial Measures” of Air Canada’s Second Quarter 2015 MD&A for additional information.
Except for the reference to average number of FTE employees, operating statistics in this table include third party carriers (such as Jazz Aviation LP (“Jazz”) and Sky Regional Airlines Inc. (“Sky Regional”)) operating under capacity purchase agreements with Air Canada.
Adjusted CASM is a non-GAAP financial measure. Refer to section 16 “Non-GAAP Financial Measures” of Air Canada’s Second Quarter 2015 MD&A for additional information.
Reflects FTE employees at Air Canada. Excludes FTE employees at third party carriers (such as Jazz and Sky Regional) operating under capacity purchase agreements with Air Canada.
Average stage length is calculated by dividing the total number of available seat miles by the total number of seats dispatched.
Revenue passengers are counted on a flight number basis which is consistent with the IATA definition of revenue passengers carried.
Copyright Photo: Rob Rindt/AirlinersGallery.com. A beautiful portait of Boeing 787-8 Dreamliner C-GHPU (msn 35259) departing from Vancouver International Airport (YVR).
Air Canada (Montreal) has announced the addition of new nonstop flights from Vancouver to Brisbane, Australia. Flights to Brisbane will initially operate three times weekly using Boeing 787-8 Dreamliners beginning on June 17, 2016, with the intention to increase to daily service, subject to obtaining the necessary government approvals.
This year to date, Air Canada has launched new international services from Montreal-Venice, Montreal-Mexico City, Toronto-Amsterdam, Vancouver-Osaka, with Toronto-Dubai and Toronto-Delhi launching this fall.
Copyright Photo: Ton Jochems/AirlinersGallery.com. Boeing 787-8 Dreamliner C-GHPV (msn 35260) taxies at Vancouver International Airport.
Air Canada (Montreal) has announced a number of product upgrades to benefit customers on its leisure airline, Air Canada rouge (Toronto).
The premium cabin in Air Canada rouge’s fleet of 20 Airbus A319 aircraft will be converted by mid-June 2015 from its current 3×3 seating configuration with a blocked middle seat to two side-by-side Business Class seats in a 2×2 configuration. This new seating provides customers more personal space and generous legroom as well as full power charging capacity with a 110-volt power plug and a high-powered USB port at every seat. Additional customer convenience features include a centre console and pop-out cocktail tray between the two seats and a coat hook at every seat.
Air Canada rouge will also increase carry-on space throughout its Airbus A319 fleet by 30 per cent with the installation of new overhead bin doors – dubbed “pillow doors” because of their curved shape – which allow carry-on items to be stowed more efficiently. The installation takes place this summer.
In addition to the upgrades on its Airbus A319 aircraft, Air Canada rouge is also enhancing its in-flight entertainment system on all Airbus A319 and Boeing 767 aircraft. Air Canada rouge is one of the first airlines in North America to offer a streaming in-flight entertainment system. This system, called player, is available complimentary to customers that have downloaded the free app onto their own laptops or mobile Apple® and Android® devices. Air Canada rouge also provides an Apple iPad® rental program onboard that is now renting out lightweight iPad Air 2® tablets that have been upgraded to feature dozens of the latest Hollywood new releases and popular iPad games for one and two players. iPad rentals are complimentary in the Premium rouge cabin.
Air Canada is Canada’s largest domestic and international airline serving more than 190 destinations on five continents. Canada’s flag carrier is among the 20 largest airlines in the world and in 2014 served more than 38 million customers. Air Canada provides scheduled passenger service directly to 64 Canadian cities, 52 destinations in the United States and 78 cities in Europe, the Middle East, Asia, Australia, the Caribbean, Mexico, Central America and South America. Air Canada is a founding member of Star Alliance, the world’s most comprehensive air transportation network serving 1,321 airports in 193 countries. Air Canada is the only international network carrier in North America to receive a Four-Star ranking according to independent U.K. research firm Skytrax that ranked Air Canada in a worldwide survey of more than 18 million airline passengers as Best Airline in North America in 2014 for the fifth consecutive year. For more information, please visit: http://www.aircanada.com follow @AirCanada on Twitter and join Air Canada on Facebook.
Air Canada rouge is Air Canada’s leisure airline. Together with Air Canada Vacations, Air Canada rouge offers competitively-priced travel to 50 exciting leisure destinations on 68 routes in Europe, Mexico, the U.S., the Caribbean, Asia, South America and Canada.
Air Canada rouge began operating July 1, 2013 with a start-up fleet of two Airbus 319 aircraft and two Boeing 767-300 ER aircraft. Air Canada rouge currently operates a total of 31 aircraft including 20 Airbus 319 and 11 Boeing 767-300 ER aircraft.
In other news, Air Canada has announced that it has elected to opt out of the Air Canada Pension Plan Funding Regulations, 2014 (the “2014 Regulations”), effective immediately. The 2014 Regulations became effective on January 1, 2014 and under their terms, Air Canada was required to make solvency deficit payments of $200 million per year, on average, over a seven-year period. The agreement entered into in connection with these regulations contained several restrictions, including a prohibition on dividends and share repurchases; however it allowed Air Canada to opt out at any time.
Air Canada has elected to opt out of the 2014 Regulations as following a detailed risk assessment, it believes the funding risk associated with the solvency of its pension plans has largely been eliminated. The committed deficit funding contributions over the next six years of approximately $1.1 billion under the 2014 Regulations may be redeployed to further improve the competitive position of Air Canada and create substantial value for shareholders and employees.
The overall risk profile of the pension plans, given the successful execution of a new investment policy and risk mitigation strategy introduced in 2009, is significantly lower. This is the result of and reflected in the following:
75 per cent of Air Canada’s pension liabilities are now immunized with duration-matched fixed income products, significantly reducing the interest rate risk associated with all pension plans. Air Canada may continue to increase immunization levels, subject to favourable market conditions.
Air Canada utilizes an overall risk measurement called “surplus risk”, measuring the potential variability of the plan assets and liabilities over the period of one year. This surplus risk has been reduced by approximately 50 per cent since 2009, a reflection of a more conservative asset mix policy.
The aggregate solvency surplus as at May 20, 2015, based on management estimates, is $1.2 billion, 82 per cent above the $660 million surplus level at January 1, 2015, and 13.5 times greater than the $89 million surplus level as at January 1, 2014.
As part of its due diligence and risk mitigation strategy, Air Canada, with the assistance of its professional actuaries, simulated 1,000 different economic scenarios on the current plan asset mix to determine what combination of economic factors would have to occur to cause Air Canada to contribute an aggregate of more than $1.2 billion to its pension plans under normal funding rules, over the next six years. Air Canada also simulated the past three economic crises (the 2009 financial crisis, the 2001-2002 technology crises and the 1970 oil crisis) to assess the effect each would have on the pension plan assets. None of those three economic crises would result in payments exceeding an aggregate amount of $1.2 billion over the next six years. With respect to the 1,000 economic scenarios, less than 2 per cent would result in payments of over $1.2 billion; however, none of these scenarios has ever actually occurred.
Three years ago, Air Canada’s domestic registered pension plans had a significant pension solvency deficit of $4.2 billion. The $5.4 billion improvement in the pension solvency position to the May 20, 2015 estimated surplus of $1.2 billion is a reflection of top quartile investment returns given the new investment strategy introduced in 2009 which created over $3.5 billion in value, negotiated pension benefit amendments which reduced the deficit by approximately $1.0 billion, and past service cash contributions by Air Canada of approximately $900 million over the past six years, which when added to the $1.0 billion contributed in current service costs represents a total contribution by Air Canada of $1.9 billion since 2009 to its Canadian registered pension plans.
In addition, the pension share trust created in 2009 as part of an earlier pension arrangement, and held in trust for the benefit of the airline’s Canadian employees and retirees, is currently valued at approximately $220 million. The trust provides that proceeds of any sale of the trust shares will be retained and applied to reduce future deficits, if any should materialize.
Under normal funding rules, Air Canada will make pension solvency payments of approximately $90 million in 2015 versus the $200 million it would have had to contribute under the 2014 Regulations, saving $110 million. Based on the solvency surplus as at January 1, 2015 of $660 million, and assuming similar market conditions to the current environment and given its immunization strategy, Air Canada expects its pension solvency payments in 2016 to be zero, saving $200 million in that year alone.
Copyright Photo: Steve Bailey/AirlinersGallery.com. Airbus A319-114 C-FYNS (msn 572) of Air Canada rouge arrives at Vancouver.