Air Canada expands Asia-Pacific flights to boost revenue

Thu Nov 29, 2012 1:28pm EST
 

(Reuters) - Air Canada ACb.TO unveiled a major expansion in its flights to Asia, a high-growth area for Canada's biggest airline in recent years, as it seeks to boost revenue in an attempt to become profitable.

In what it described as its "most far-reaching international expansion of its schedule in its 75-year history," Air Canada said on Thursday it would add flights from Canada to Asian cities including Beijing, Seoul and Narita, Japan. Subject to government approval, the airline will also start flying to Istanbul.

Until now, Air Canada, which has only made a profit one year out of the past six, has tended to emphasize cutting costs as a way to return it to profit. On the revenue front, it is facing a challenge at home from its biggest domestic rival, WestJet Airlines Ltd (WJA.TO: Quote), which plans to launch a new regional carrier next year to fly between small towns in Canada.

"Air Canada's announcement today does reflect the new world order of aviation in terms of the markets that are growing - Asia Pacific and Middle East," said Robert Kokonis, managing director of Toronto-based airline consultant AirTrav Inc.

"We been saying that since the 2008 recession, the best sources of yield recovery have been on Asia Pacific routes," Kokonis said.

In the first 10 months of 2012, Air Canada's load factor - the percentage of available seats filled with paying customers - was 88.8 percent on its Pacific routes, compared with 83.2 percent system-wide, Kokonis said.

The expanded schedule will take effect in June 2013.

(Reporting By Nicole Mordant in Vancouver)

 
The Air Canada logo is shown on the tail of a plane on the tarmac at Pearson International Airport in Toronto, June 17, 2008. REUTERS/Mike Cassese