9 AIR TRANSPORTATION
PASSENGER TRANSPORTATION
TRAFFIC
Passenger traffic in 2005 reached record levels with over 63 million passengers, a six per cent increase over 2004. As shown in Table 9-1, domestic, transborder and international sectors registered significant growth with increases of four per cent for the domestic sector and seven per cent for the transborder and international sectors.
For a summary of 2004 traffic at the 26 NAS airports, by sector and region, see Table A9-17 in the Addendum.
TABLE 9-1: AIR PASSENGER TRAFFIC, 2001 – 2005
| (Thousands of passengers) |
| |
Domestic |
Transborder |
International |
Total |
| Air Passengers |
|
|
|
|
| 2001 |
24,994 |
18,568 |
13,196 |
56,758 |
| 2002 |
23,862 |
17,575 |
12,930 |
54,367 |
| 2003 |
25,234 |
16,585 |
12,661 |
54,753 |
| 2004 |
27,362 |
18,492 |
14,269 |
60,123 |
| 2005 |
28,542 |
19,818 |
15,329 |
63,689 |
| Annual Change (Per cent) |
|
|
|
|
| 2002/01 |
(4.5) |
(5.3) |
(2.0) |
(4.2) |
| 2003/02 |
5.7 |
(4.1) |
(2.1) |
0.7 |
| 2004/03 |
8.4 |
9.7 |
12.7 |
9.8 |
| 2005/04 |
4.3 |
7.2 |
7.4 |
5.9 |
Notes: Data estimated for 2004 and 2005
Passenger Traffic is based on enplaned and deplaned passengers, but results for the domestic sector have been divided by two to avoid double counting of passengers.
Source: Statistics Canada
SERVICES
DOMESTIC
Airlines consolidated their position with the modest expansion in traffic in 2005 and the demise of Jetsgo in March. Air Canada is about halfway through its fleet renewal plan, which will see the addition of 90 new regional jets by the beginning of 2008. Air Canada announced late in the year that it would be leasing an additional eight regional aircraft for a four-year period. As a result of the expansion of the fleet, Air Canada transferred several domestic services to Jazz. Cities affected include Fredericton, Moncton, Quebec City, Regina, Saint John, Saskatoon and Thunder Bay. In addition, Jazz started several new routes in western Canada, restoring capacity that had been cut back in 2004. A new route between Calgary and Fort McMurray was the most notable addition.
Change continued at Hamilton airport with the departure of CanJet Airlines in July 2005. CanJet entered the market in 2004, filling some of the void left when WestJet reduced service. In its place, Air Canada Jazz introduced new service to both Montreal and Ottawa in September. The Montreal service operates four times daily and the Ottawa service three times daily. The new flights are being operated by Jazz with 50-seat regional jets.
Last year, many local service airlines were active, with Air Labrador continuing its expansion in Quebec and introducing a new Quebec–Îles de la Madeleine service via Moncton. However, local service airlines were affected by high fuel prices. Norcanair, which had been serving nine points in Saskatchewan, ceased service in February 2005. Transwest Air continues to provide service to the region. Regional 1 Airlines, which had been serving in Alberta and British Columbia, ceased operations in September 2005. In addition, British Columbia-based Hawkair announced in October that it is seeking to restructure itself under the Companies' Creditors Arrangement Act. Hawkair plans to continue operations while under bankruptcy protection.
Addendum Table A9-18 shows a list of new and discontinued domestic services.
TRANSBORDER
WestJet continued its expansion in the transborder sector, adding five more destinations in 2005 in addition to the seven airports that it began serving in 2004. The new points include new seasonal services to Fort Myers and Palm Springs, services from Vancouver to Honolulu and Maui and the introduction of scheduled flights to Las Vegas from six Canadian cities. Many of the services to Las Vegas previously operated as charter services. Air Canada was also active in the Las Vegas market, adding new routes from Calgary and Vancouver, as well as increasing flights from Montreal and Toronto. The cessation of service by Jetsgo in March particularly affected the Florida market; however, other airlines, most notably Air Canada and WestJet, restored much of the lost capacity by year-end.
Despite record load factors, high fuel prices coupled with declining passenger yields prompted Delta Airlines and Northwest Airlines to seek bankruptcy protection in 2005. Two other major carriers, United Airlines and US Airways, were also operating under bankruptcy protection at the time. The affected airlines have responded to the financial situation by reducing capacity within North America, including some routes to Canada. Further reductions in service are expected in 2006 while the U.S. industry restructures. US Airways, having been acquired by America West Airlines, has since emerged from bankruptcy protection. The merged airline is to operate as US Airways. ACE Aviation Holdings, the parent of Air Canada, announced that it would take a seven per cent financial interest in the merged airline.
For more details on both new and discontinued transborder services see Table A9-19 in the Addendum.
INTERNATIONAL
Air Canada continued to develop non-stop services to Asia from Toronto with the addition of year-round service to Beijing and Seoul in 2005. In addition, Air Canada introduced new services to Rome and Santo Domingo. Several foreign airlines started new routes to Canada in 2005. Air India returned to Canada after an eight-year hiatus with new flights between Toronto and Delhi. The thrice-weekly service stops at Amritsar and Birmingham. In addition, Etihad Airways began a thrice-weekly service to Toronto from its base at Abu Dhabi. Other newcomers to the Canadian market include Transaero Airlines with a Montreal–Moscow service and Universal Airlines with services between Hamilton and Guyana. See Addendum Table A9-20 for a list of new and discontinued international services.
COMPETITION
Domestically, the recent trend of low-cost airlines increasing their share of the domestic market was reversed in 2005 with the cessation of operations by Jetsgo. From December 2004 to December 2005, Air Canada's capacity share increased by eight percentage points to 60 per cent, while WestJet's share rose to 29 per cent and CanJet to three per cent. Air Canada increased their share of capacity in all markets except for northern Canada where airlines such as Air North, Canadian North and First Air maintained their position. Although Air Canada's share of domestic capacity increased considerably in 2005, the current figure is far lower than the 79 per cent capacity share it held in December 2001. For further information on domestic market share by airline and by region in December 2005, see tables A9-21 and A9-22 in the Addendum, and for the summarized results of the top 25 domestic markets, see Table A9-23.
Major Events in 2005
Infrastructure
Industry Structure
Price, Productivity, Financial Performance
Freight Transportation
Passenger Transportation
