Air Canada to Cut Capacity, Routes Due to High Fuel Costs

Air Canada to Cut Capacity, Routes Due to High Fuel Costs

Air Canada said it will cut capacity and eliminate some unprofitable routes this year because of high fuel costs. Last month, Air Canada said that its 2011 system-wide capacity growth would be in the 5.5 percent to 6.5 percent range versus 2010. In response to higher fuel prices, Air Canada now expects 2011 system-wide capacity growth of 4.5 percent to 5.5 percent versus 2010.

Air Canada’s expectations for its 2011 first-quarter system-wide capacity growth are revised to 7.5 percent to 8 percent versus 2010, a slight decrease from the 7.5 percent to 8.5 percent range projected in its Feb. 10, 2011 news release. Air Canada continues to expect to increase its full-year 2011 domestic capacity by up to 1.5 percent from the full-year 2010 levels.

The reduction in system-wide capacity will mostly impact the remaining quarters in the year and will be achieved with minimal impact on customers through reductions in frequency, down gauge of aircraft, and suspension of the following routes no longer profitable in the current high-fuel price environment, effective May 1, 2011: Ottawa-Thunder Bay, Ottawa-Washington Dulles, Montreal-Washington Dulles, Calgary-Chicago, Calgary-San Francisco and Calgary-London, Ontario. Customers will be offered alternate flights or routings as options.

Air Canada has been introducing base fare increases and fuel surcharges on a market-by-market basis. The airline will continue to adjust fares and fuel surcharges in response to market conditions, including fuel prices, and make adjustments to capacity as required.