VANCOUVER — Air Canada ended the year flying high at its Vancouver industry Christmas party with new routes nailed down in 2016, more routes announced for 2017 and a stellar third-quarter financial report and expansion plans that would see substantial growth in 2017 and into 2020.
A spokesperson for Vancouver International Airport confirmed that Air Canada dominates Canada’s westerly gateway as the airport is recording unprecedented numbers of passengers in 2016.
“We could not have done it without Air Canada,” said Anne Murray, VP, marketing and communications. She said 50% of YVR passengers fly on Canada’s national carrier.
“From January to October we saw 18.8 million passengers go through YVR, which is a 9.5% growth compared to last year for the same period,” Murray told agents at the airline’s Christmas party at the Waterview Events Centre, across from Granville Island. She said the airport is expecting a record year with a total of 22 million passengers by year’s end.
She credits much of the traffic increase to Air Canada’s eight new routes announced in 2016.
“For 2107, Air Canada has already announced five new cities (out of YVR) it will be flying to,” she said.
The five new destinations for 2017 are Gatwick, Frankfurt, Taipei, Nagoya and Dallas.
Air Canada’s VP Global Sales Duncan Bureau said a sixth destination – to a North American city – is expected to be announced shortly. In the past four years the company has grown by $4 billion in new revenues.
“We are in a very strong position in Western Canada,” said Bureau, who is familiar with the Western Canadian market as he hails from Malaysian Airlines and prior to that, WestJet.
Air Canada, like other airlines enjoying low fuel prices, is seeing record earnings and double-digit passenger increases. The company’s third-quarter results earnings (before interest, taxes, depreciation, amortization and aircraft rent of $1.248 billion) are a high point for the company. “They were the best results in our 80-year history,” he said. That same quarter saw a hefty 18.9% system-wide traffic growth verses the same period in 2015.
Expansion plans are in place to grow line revenues another $4 billion from 2017-2020, he said. Growth of that size would continue the double-digit trajectory for Air Canada in combined destination markets. According to Bureau, by the end of 2017 Air Canada is projecting it will carry 40 million passengers.
By the end of decade, from 2018 into 2020, the goal is to carry 50 million passengers, a growth projection of 20% in passenger loads. By the end of the decade Air Canada also hopes to have 250 markets in place on six continents, he said.
He estimates the growth will come from all markets: domestic, North American and international flights.
Not even the recent announcement by Organization of Petroleum Exporting Countries (OPEC) to cut oil production – the first cut in eight years – is dampening Air Canada’s ambitious goals.
Bureau said the company has been investing its profits garnered from recent profitable years and putting that capital into a fleet renewal. Its new 787s are flying out of Vancouver and will achieve better fuel economies on the long-haul routes. “We are putting the right sized aircraft on the right routes,” he said, a move that will insulate the company against rising fuel costs. (The company’s third quarter report also asserts that the rising and falling Canadian dollar compared to the U.S. will also compensate for any fuel cost increases.)
Rising fuel prices also bring an upside, Bureau said, as the higher barrel prices kick-start other oil producing areas and that means more traffic into these oil-producing areas outside the OPEC countries.
He said that Air Canada remains a four-star carrier and that aspect has strong appeal to business travellers originating out of Canada.
Travel agent Nick Panos, owner of Omega Travel International and a major producer for Air Canada, came to the party to celebrate 2016 as an “excellent” year for his company in terms of selling seats on Air Canada flights. The European routes have been especially popular, but sales have been good for all markets, said Panos. He said a major selling point for Air Canada flights are the “very good connections” the airline has around the world.