Air Canada reported their 2016 financial results on Feb. 23 and the results are impressive.

Canada’s largest airline posted record results for 2016, including record earnings of $2.768 billion, an 8.9 per cent increase over 2015.  And although Air Canada recorded a loss of $179 million for the fourth quarter, net income at the airline grew 184 per cent, rising from $308 million in 2015 to $876 million in 2016.

“We're obviously very pleased with these results," said Duncan Bureau, Air Canada's Vice President of Global Sales, during a one-on-one interview with TravelPulse. "This will be our third consecutive year of positive results and profit sharing with our employees and we're extremely excited about how we were able to reduce costs while growing the airline. We’re proud to have launched 28 new routes in 2016, our largest single year of growth in our history.  We grew ASMs (Available Seat Miles) by 50 per cent and carried 45 million passengers in 2016, and so accolades to all of our excellent employees, from management to the front line.”

2016 system passenger revenues of $13.15 billion increased 5.9 per cent from 2015 and traffic grew 13.2 per cent, with traffic increases in all of Air Canada's geographic markets.

An expected effect of the implementation of Air Canada's strategic plan for sustained, profitable growth, was a drop in yield, which declined by 6.6 per cent. Contributing to the decline in yield was a 5.1 per cent increase in average stage length (the length of the average flight), an increase in the number of seats in long-haul leisure markets, lower carrier surcharges, and competitive pressures in domestic, Transatlantic and Transpacific markets.

For the fourth quarter of 2016, Air Canada reported record system passenger revenues of $3.035 billion, an increase of 7.0 per cent from the fourth quarter of 2015.  And although traffic grew by 15.3 per cent, operating expenses increased $383 million or 13 per cent to $3.407 billion and yield declined by 7.2 per cent.  With operating income of $18 million in the fourth quarter of 2016 compared to $158 million in the fourth quarter of 2015, the airline reported a net loss of $179 million in the fourth quarter of 2016 compared to a net loss of $116 million in the fourth quarter of 2015, when factoring in special items.

With revenue and traffic increasing in all markets, transborder growth surpassed Air Canada’s expectations, with fourth quarter revenue increasing $65 million or 10.1 per cent, and transborder traffic increasing 15 per cent.

“We're very pleased with how the U.S. is performing. We launched 11 new transborder routes in 2016 and we're focused on generating revenue from point of origin U.S. traffic,” said Bureau. “And we’re working to attract more and more International traffic transiting Canada en route to destinations overseas. Through our strong relationships with the GTAA and Vancouver Airport Authority, we're making it easier for U.S.-originating traffic to connect to International points.”

When asked how the Canadian travel agency community contributed to these successes, Bureau had this to say.  “We couldn't have achieved these results without travel trade support.  We have broad relationships and very strong relationships.  In fact, the best relationships we've had in years.  And so the travel trade is extremely valued as we continue to grow moving forward.”

For more information, visit www.aircanada.ca. 

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