Air Canada premium cabin revenues up in Q2

Washington DC
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Air Canada has seen premium cabin revenues rise 3.3% in the quarter year-over-year, a C$19 million ($18.2 million) increase on premium traffic growth of 1.1% and yield growth of 2.2%.

This growth was driven in part by the A++ transatlantic joint venture that Air Canada has formed with Star Alliance partners United Airlines and Lufthansa on routes across the Atlantic. Some markets for connecting traffic are also seeing premium revenue benefits from the tie-up, says Ben Smith, Air Canada's chief commercial officer during an earnings call today.

The Montreal-based carrier saw yields on transatlantic traffic increase 7.7% in the second quarter, which was a result of a higher proportion of premium traffic and favourable impacts of currency, regulatory filings show.

Despite the strong premium revenue performance in the second quarter, Air Canada's premium cabin revenues for the first half of 2013 have decreased C$18 million compared to the first six months of 2012. In the first quarter, Air Canada's premium traffic revenues decreased C$38 million.

Several factors in the first quarter impacted these results, including weather cancellations, which caused Air Canada to lose "a lot of short, close-in business bookings that we normally see," says Smith. Other factors affecting business travel in the first quarter included one fewer calendar day in February 2013 and the timing of the Easter holiday. The second quarter showed a more normal representation of what the premium cabin demand looks like, he says.