Category: Air Canada

A new YUL route, Continuous Pricing & more for Lufthansa Group

News provided by

Thursday, November 15, 2018 Posted by Travelweek Group

TORONTO — The Lufthansa Group (LHG) is many things – an airline group, an aviation company, and a “human-centric” global corporation. What it’s not? An Uber in the sky.

Delivering far more than simple A to B travel experiences, LHG – whose main hub airlines include Lufthansa, SWISS and Austrian Airlines – is investing heavily into modernizing its fleets, expanding its networks, and digitizing its platforms, all of which are being done in response to customer needs, said Heike Birlenbach, Senior Vice President Sales, Lufthansa HUB Airlines.

“Our customers’ expectations are changing and we need to make sure that we’re not a one-size-fits-all,” she said in a media briefing in Toronto yesterday. “We need to be able to respond to their needs, and this means relying on and investing in technology. To some it’s a buzz word, but to us we see it as a real opportunity to cater to our customers.”

Coming off its best year in history in 2017, Birlenbach said 2018 is also looking good for LHG, which just released its Q3 results. It generated total revenues of EUR 26.9 billion in the first nine months, an increase of 6% over the prior year, with traffic revenues also up 7%. In October alone, the Group welcomed around 13.2 million passengers, an increase of 9% compared to the previous year’s month.

And with more digital capabilities on the horizon, plus a new Montreal-Vienna route coming in spring 2019, LHG’s presence among both travellers and travel partners – particularly in Canada – is only set to increase in the coming years.

Here are some highlights:


Beginning April 29, 2019, Austrian Airlines will introduce year-round flight service between Montreal and Vienna on Boeing 767 aircraft. Service will occur daily throughout the summer schedule and five times per week during the winter season.

With this new route, Austrian’s existing Toronto-Vienna service will be taken over by Star Alliance partner airline Air Canada, also starting on April 29, 2019, year-round, daily, nonstop, onboard its Boeing 787-9 Dreamliner. These flights will operate five times weekly during the winter, and daily throughout the summer. The flight connection between Vienna and Toronto will also be bookable as a codeshare flight via Austrian Airlines.


Through its joint venture with United and Air Canada, the Lufthansa Group enjoys close to 30% marketshare in the North Atlantic (Canada and the U.S.), which represents the largest group capacity for transatlantic. The Toronto-Vienna route, which will be taken over by Air Canada, is “a perfect example of how well we work with Air Canada,” said Hans DeHaan, Senior Director Canada of Lufthansa Group.

Birlenbach added that LHG is now entering a new stage of the joint venture, “where we’ll have even stronger ties to each other.” Next steps involves making sure that “we have seamless customer experiences between the airlines.”

In the North Atlantic, LHG offers 352 weekly flights in 23 destinations, three of which are in Canada (Toronto, Montreal and Vancouver). These three are connected to five main hubs – Vienna, Zurich, Frankfurt, Munich and Brussels, and from there, everywhere beyond.


According to Birlenbach, Lufthansa took a rather disruptive approach a couple years ago when it first launched NDC (New Distribution Capability) initiatives. As one of the first airlines to adopt the IATA-backed program, Lufthansa now has 2,000 agencies connected via NDC channels, which allow them to sell all the airline’s products.

Encouraging all travel agencies to “walk with us into the future,” Birlenbach added that Lufthansa is also working on expanding its own web offerings. “Thirty percent of our tickets are managed through our platforms,” she noted.

LHG has launched an NDC microsite – – that highlights all the ways the Group supports agencies on the technical side. It also works with Farelogix (for larger agencies), and SPRK (for smaller agencies), a free web-based booking platform.

“All this is a sign that we really want to take the trade along on our journey and make sure they understand why we’re moving in this direction,” said Birlenbach.

Other digital initiatives include, an automated check-in assistant that checks in travellers for flights on more than 200 different airlines, and a Facebook Messenger service (still in its Beta version) that allows travellers to rebook tickets directly from the app.


In development right now for LHG’s hub airlines is Continuous Pricing, which Birlenbach said was created in response to increased competition and ever-changing dynamics in the marketplace. With all of the world’s airlines currently working on a pricing structure based on the 26 letters of the alphabet, which serve as ‘steps’ so to speak, LHG is opting for a more dynamic logic that offers infinite steps, with in-between price points.

“With the current pricing structure, if one price isn’t available anymore, then the next level comes up and it might be a difference of, say 100 euros or Canadian dollars,” she said. “But with Continuous Pricing, every agency or corporation that’s connected to us directly will be able to get all those price points in between. This will really benefit the customer since it’s usually the lower price available before getting to the next level.”

Adding that Continuous Pricing will be sellable in the marketplace, Birlenbach believes that once it’s established, agencies will call for a direct connect solution.

Continuous Pricing is already available in Germany for partner agencies, and will be launched internationally in 2019.


LHG has spent approximately 500 million euros throughout the years on digital innovation, going so far as to create a brand new company in Berlin called Lufthansa Innovation Hub. Through the company, which launched in 2014, LHG searches for travel-based startups for possible investment opportunities, a venture that has proven so successful that it’s opening two additional branches in Singapore and China.


According to Birlenbach, by year’s end LGH will have spent about 3 billion euros in new aircraft and services. By average, the Group will spend approximately 2 billion euros per year over the next few years in order to modernize its fleet, which currently sits at about 730 aircraft.

In May 2018, Lufthansa switched from the A330 to the A350-900 on its summer route from Vancouver to Munich. The aircraft will resume servicing this route in the summer 2019 timetable.

Austrian Airlines’ new Premium Economy Class has been fitted on all of its long-haul aircraft, featuring a total of 228 seats that were produced specially for LHG.

Lufthansa will be a launch customer for the new Boeing 777X, which will enter its long-haul fleet in 2020 (it’s not known at this time whether it will service Canada). The 777, which is considered more environmentally friendly and fuel-efficient than other aircraft, will feature a brand new business class.

In addition to the 777, Birlenbach said more A350s are coming. Lufthansa’s 747-400s will be phased out over time.


Lufthansa Business Class passengers on flights lasting more than 10.5 hours can enjoy the new Lufthansa Dream Collection, which includes a pillowcase, blanket and mattress topper.

On Austrian, passengers can take advantage of a full Business cabin where there’s a ‘Coffeehouse in the Sky’, a curated collection of up to 12 different brews made right in the galley. A chef – complete with a chef’s hat – also walks around the Business cabin to take passengers’ food orders.

SWISS passengers can book the Economy Light airfare on North American routes, considered the least expensive option for price-conscious passengers who only travel with carry-on luggage.

And on SWISS and Brussels Airlines, passengers now have the option to extend their trip by a few days with the new ‘Stopover Switzerland’ and ‘Belgium Stop Over’ programs, currently offered within certain markets, including Canada and the U.S.


Canadian Talent Choosing Air Canada: Airline Named One of Canada’s Top 100 Employers for the Sixth Consecutive Year

News provided by Air Canada

  • Award reflects engaged and energized workforce proud to #FlyTheFlag

MONTREALNov. 9, 2018 /CNW Telbec/ – Air Canada today was named one of Canada’s Top 100 Employers (2019) for the sixth consecutive year in an annual national employer survey by Mediacorp Canada Inc.

“We are very proud to be ranked one of Canada’s top employers for the sixth straight year. This is a testament to the strong engagement of Air Canada’s 32,000 employees, which is absolutely essential to delivering excellent service to the 48 million customers we carry each year,” said Arielle Meloul-Wechsler, Senior Vice President, People and Culture, at Air Canada. “Being consistently recognized as one of Canada’s Top 100 employers is also further evidence of the successful transformation of Air Canada. We have made culture a core priority and this has been instrumental in earning us a place among the leading global carriers.”

Air Canada’s Top 100 Award

Entering its 20th year, the Canada’s Top 100 Employers competition recognizes employers with exceptional human resources programs and forward-thinking workplace policies. Starting with an initial list of more than 90,000 employers, Mediacorp graded those selected on eight criteria, which have remained constant since the project’s inception: Physical Workplace; Work Atmosphere & Social; Health, Financial & Family Benefits; Vacation & Time-Off; Employee Communications; Performance Management; Training & Skills Development; and Community Involvement.

Mediacorp cited several unique employee support and engagement programs at Air Canada. These include: state-of-the-art training facilities; programs to promote health, fitness and wellness; generous benefits and perks for employees and their families and a consultative approach to workplace developments, such as recent head office renovations where Air Canada sought employee feedback on everything from storage space design to the final décor.

Working at Air Canada

Air Canada’s reputation as one of Canada’s Top 100 employers has made the airline a destination of choice for people seeking a challenging career. It receives 23,000 visits each month to the employment page of its website and on average there are 340 applicants per position for each vacancy filled. In 2018 alone, Air Canada has hired more than 5,700 people.

For more information on career opportunities with Air Canada please visit

In addition to being named one of the Top 100 Employers in Canada (2019), Air Canada has received other recognitions for employee engagement in 2018 including:

  • Air Canada was named one of the 50 Most Engaged Workplaces in North America for the third Consecutive Year by Achievers;
  • Air Canada has been named one of the top five most attractive company brands to work for in Canada according to the Randstad Employer Brand Research independent survey;
  • Air Canada was named one of Montreal’s Top Employers for the fifth consecutive year in Mediacorp Canada Inc.’s survey. Air Canada was recognized for exceptional human resources programs and forward-thinking workplace policies;
  •  Air Canada was named one of Canada’s Best Diversity Employers for 2018. Air Canada was recognized for its success in such areas as promoting women, including in non-traditional roles, by Mediacorp Canada Inc.


Air Canada Proudly Flies the Flag in Support of Calgary’s Bid for the 2026 Olympic and Paralympic Winter Games

  • Official airline of Canadian Olympic and Paralympic teams
  • Transporting athletes for the city’s bid events and loaning experienced executive expertise to the Calgary 2026 Bid Corporation

MONTREALNov. 5, 2018 /CNW Telbec/ – Air Canada announced today it is proudly supporting the City of Calgary’s bid for the 2026 Olympic and Paralympic Winter Games.

“Air Canada has a long association with Canada’s Olympic and Paralympic athletes and particularly at home Games, starting with being the Official Airline at Calgary’s highly successful 1988 Olympic Winter Games. We are tremendously proud to fly the flag as we fully support the city’s bid for the 2026 Olympic and Paralympic Winter Games. On behalf of our 30,000 worldwide employees, and especially our team of 1,900 employees who live and work in Calgary, we wish Calgarians the very best in their pursuit of these Games,” said Calin Rovinescu, President and Chief Executive of Air Canada.

“Our support started in April of this year with a firm commitment in writing to the City of Calgary of our support for the bid. To further demonstrate Air Canada’s support, one of our senior executives, Renee Smith-Valade, who has direct experience from eight previous Olympic Games – including both the Calgary 1988 and Vancouver 2010 Games – has been temporarily seconded to work with the Calgary 2026 Bid Corporation through the plebiscite and initial preparation of the international bid phase, and we are assisting in transporting athletes for special events related to Calgary’s bid.”

“A partner of the Calgary 1988 Olympic Winter Games and a longtime supporter of Team Canada, Air Canada is engrained in the Olympic movement in our country. No matter where in the world we have asked them to be, Air Canada has brought our athletes there and back, with the best care and service. Both COC and Air Canada know that hosting the 2026 Winter Games represents an incredible opportunity to welcome the world to our country,” said Robin Brudner, Interim CEO & Secretary General of the Canadian Olympic Committee.

“Actions speak volumes: Air Canada, Canada’s flag carrier, stepped up early on to strongly encourage this bid to go ahead, and now, has stepped up with expertise, travel and employee engagement as we lead up to Canada’s Games, Calgary’s choice.  We’re grateful for Air Canada’s support for the 2026 Calgary Bid Corporation and their ongoing support for Team Canada,” said Scott Hutcheson, Chairman of the Board, Calgary 2026 Bid Corporation.

Key facts about Air Canada’s involvement in the Olympic movement include:

  • Official Airline for the two previous home Games: Vancouver 2010 Olympic and Paralympic Winter Games, and the Calgary 1988 Olympic Winter Games
  • Official transportation provider for Canadian Olympic teams at Beijing 2008, Vancouver 2010, London 2012, Sochi 2014, Rio 2016, Pyeongchang 2018, and Tokyo 2020
  • Proud supporter of the successful bids and organizing committees for:
    • the Vancouver 2010 Olympic and Paralympic Winter Games
    • the Calgary 1988 Olympic Winter Games
    • the Montreal 1976 Olympic Games
    • the Victoria 1994 Commonwealth Games
    • the Winnipeg 1999 Pan Am Games
    • Air Canada also sponsored bids for the Quebec City 2002 Olympic Winter Games and the Toronto 2008 Olympic Games.
  • Created the Altitude Podium Program to provide qualified athletes 35K status and access to International Maple Leaf lounges while competing abroad
  • Sponsored the outdoor area, Air Canada Flight Deck, available to the public, at the Canadian Olympic House in PyeongChang
  • Air Canada’s “Our Time” ad campaign supported the athletes by paying tribute to the unique Canadian values that make us all so proud to be a part of this country. Five high-profile athletes featured in the ad are figure skaters Patrick ChanTessa Virtue and Scott Moir; hockey player Marie-Philip Poulin; and freestyle skier (halfpipe) Cassie Sharpe.

Air Canada Reports Third Quarter 2018 Results

  • Third quarter EBITDAR of $1.265 billion and operating income of $840 million
  • Record third quarter operating revenues of $5.415 billion
  • Record unrestricted liquidity of $5.309 billion
  • Leverage ratio of 2.0

MONTREALOct. 31, 2018 /CNW Telbec/ – Air Canada today reported third quarter 2018 EBITDAR(1) (earnings before interest, taxes, depreciation, amortization, impairment and aircraft rent) of $1.265 billion compared to third quarter 2017 EBITDAR of $1.360 billion.  Air Canada reported operating income of $840 million compared to operating income of $976 million in last year’s quarter.  The airline reported third quarter adjusted pre-tax income(1) of $793 millioncompared to adjusted pre-tax income of $922 million in the prior year’s quarter.  On a GAAP basis, in the third quarter of 2018, Air Canada reported income before income taxes of $876 million compared to income before income taxes of $965 million in the third quarter of 2017.

“I am extremely pleased with both our unit revenue performance and our adjusted CASM(1) results for our all-important third quarter.  Quarterly operating revenue grew 11 per cent, exceeding $5 billion for the first time in our history, and our year-over-year PRASM performance was among the best in the North American airline industry.  Strong revenue and cost management substantially offset the challenges we faced in the quarter, principally the significant increase in fuel prices.  Once again, the strength of our brand and of our people shone through in the quarter,” said Calin Rovinescu, President and Chief Executive of Air Canada.

“Going forward, we expect our revenue momentum to continue in the fourth quarter and into next year.  Indeed, with the trends we are seeing now, we expect our PRASM performance, both in the domestic market and throughout the network, to continue to improve in the final quarter of 2018,” said Mr. Rovinescu.

“Complementing our record revenue generation was a disciplined and efficient approach to costs. Adjusted CASM rose 1.1 per cent from the third quarter of the prior year, well below the 2 to 3 per cent increase projected for the period with our second quarter results in July. Largely driven by higher fuel prices, Air Canada’s CASM increased 9.8 per cent from the third quarter of 2017.  Cost control will remain central to our strategy and we have already identified or realized two-thirds of the $250 million cost transformation program initiated early this year. Furthermore, we reached record unrestricted liquidity of $5.3 billion and achieved a leverage ratio(1) of 2.0.

“Our business model is creating substantial value.  We have a powerful and comprehensive network with three strong global hubs.  We have a compelling product and customer offering.  In July, Air Canada was named the Best Airline in North America for the second consecutive year and for the seventh time in nine years by Skytrax, which has also reaffirmed Air Canada’s rating as North America’s only four-star international network carrier.

“I thank our 30,000 employees for their hard work in taking care of our customers during a challenging but satisfying summer. We set a new, single-day record for passengers carried of more than 178,000 in August.  Finally, I also thank our customers for their continued loyalty. It is our unwavering commitment to continue improving and providing superior, award-winning service as we transport them safely to their destinations,” concluded Mr. Rovinescu.

Acquisition of Aimia’s Aeroplan Loyalty Business

On August 21, 2018, Air Canada, The Toronto-Dominion Bank, Canadian Imperial Bank of Commerce, Visa Canada Corporation (collectively, “the Consortium”) and Aimia Inc. (“Aimia”) announced that they had entered into an agreement in principle for the acquisition of Aimia’s Aeroplan loyalty business.  The transaction is subject to the satisfactory conclusion of definitive transaction documents, Aimia shareholder approval, and certain other conditions, including due diligence, receipt of customary regulatory approvals and completion by the Consortium of credit card loyalty program and network agreements for future participation in Air Canada’s new loyalty program.  The transaction is expected to be completed by the end of 2018.

Third Quarter Income Statement Highlights

In the third quarter of 2018, on capacity growth of 6.7 per cent, record system passenger revenues of $5.018 billionincreased $504 million or 11.2 per cent from the third quarter of 2017.  The increase in system passenger revenues was driven by traffic growth of 7.5 per cent and a yield improvement of 3.4 per cent, despite an increase in average stage length of 1.3 per cent which had the effect of reducing system yield by 0.7 percentage points. On a stage-length adjusted basis, system yield increased 4.1 per cent year-over-year.  Passenger revenue per available seat mile (PRASM) increased 4.2 per cent over the same quarter in 2017, or 4.9 per cent on a stage length adjusted basis.

In the business cabin, system passenger revenues increased $98 million or 13.0 per cent from the third quarter of 2017 on traffic and yield growth of 8.9 per cent and 3.7 per cent, respectively.

In the third quarter of 2018, operating expenses of $4.575 billion increased $671 million or 17 per cent from the same quarter in 2017, mainly driven by higher fuel prices year-over-year and by the increase in capacity.

Air Canada’s cost per available seat mile (CASM) increased 9.8 per cent from the third quarter of 2017.  The airline’s adjusted CASM increased 1.1 per cent from the prior year’s quarter, better than the 2.0 to 3.0 per cent increase projected in Air Canada’s news release dated July 27, 2018.  Air Canada’s better than expected adjusted CASM performance was largely driven by lower than forecasted Regional airlines expense, the impact of cost reduction initiatives related to Air Canada’s cost transformation program, and other operating expense reductions.  The lower Regional airlines expense was primarily due to certain engine maintenance events being recorded as capitalized maintenance versus operating expense in the third quarter of 2018, as well as timing of maintenance activities related to the Air Canada Express fleet.

Air Canada reported adjusted net income(1) of $561 million or $2.03 per diluted share in the third quarter of 2018 compared to adjusted net income of $922 million or $3.33 per diluted share in third quarter of 2017.  On a GAAP basis, the airline reported third quarter 2018 net income of $645 million or $2.34 per diluted share compared to third quarter 2017 net income of $1.723 billion or $6.22 per diluted share. The net income in the third quarter of 2017 included an income tax recovery of $758 million.

Financial and Capital Management Highlights

At September 30, 2018, unrestricted liquidity (cash, short-term investments and undrawn lines of credit) amounted to $5.309 billion, the highest level in Air Canada’s history (December 31, 2017 – $4.181 billion).

At September 30, 2018, adjusted net debt of $5.620 billion decreased $496 million from December 31, 2017.  In the nine months ended September 30, 2018, increases in long-term debt and finance lease balances of $559 million and capitalized operating lease balances of $63 million were more than offset by an increase in cash and short-term investment balances of $1,118 million.  At September 30, 2018, Air Canada’s leverage ratio was 2.0 versus a ratio of 2.1 at December 31, 2017.

Net cash flows from operating activities of $371 million in the third quarter of 2018 decreased $122 million compared to the third quarter of 2017.  Free cash flow(1) of $470 million in the third quarter of 2018 represented an increase of $146 million from the third quarter of 2017.  Third quarter 2018 free cash flow included net proceeds of $293 million from the sale of 25 Embraer 190 aircraft.

For the 12 months ended September 30, 2018, return on invested capital (ROIC(1)) was 12.7 per cent, significantly higher than Air Canada’s weighted average cost of capital of 7.4 per cent.

2017 Investor Day Targets and Current Outlook

At its September 2017 Investor Day, Air Canada provided guidance on key financial metrics:

  • Annual EBITDAR margin (EBITDAR as a percentage of operating revenue) of 17-20 per cent in 2018, 2019 and 2020:
    As disclosed in its news release dated July 27, 2018, Air Canada continues to expect to achieve an annual EBITDAR margin of approximately 16 per cent for the full year 2018.  This decrease in projected EBITDAR margin takes into account a significantly higher fuel price per litre than that assumed in Air Canada’s Investor Day news release dated September 19, 2017.  As additional mitigation measures take effect, including further pricing and productivity improvements and the airline’s $250 million Cost Transformation Program due for completion in 2019, Air Canada is confident that its EBITDAR margin and ROIC will normalize by year-end and that it will realize these Investor Day targets post-2018.

    • As mentioned above, Air Canada continues to expect to achieve an annual EBITDAR margin of 17-20 per cent in 2019 and 2020.
  • Annual ROIC of 13-16 per cent in 2018, 2019 and 2020:
    As disclosed in its news release dated July 27, 2018, Air Canada continues to expect its annual ROIC to be approximately 12 per cent in 2018.  This decrease in projected annual ROIC reflects Air Canada’s expectation of a lower level of adjusted net income than previously anticipated.

    • As mentioned above, Air Canada continues to expect to achieve an annual ROIC of 13-16 per cent in 2019 and 2020.
  • Cumulative free cash flow of $2.0 billion to $3.0 billion over the 2018-2020 period.
    • Air Canada continues to expect to achieve this target.
  • A leverage ratio not exceeding 1.2 by the end of 2020 (measured by adjusted net debt over trailing 12-month EBITDAR):
    • Air Canada continues to expect to achieve this target.

Full Year 2018 Free Cash Flow

Air Canada now expects positive free cash flow in the range of $500 million to $600 million in 2018, as opposed to the range of $350 million to $500 million projected in Air Canada’s news release dated July 27, 2018, largely due to higher than expected cash from operations, including working capital.

Fourth Quarter and Full Year 2018 Adjusted CASM

For the fourth quarter of 2018, Air Canada expects adjusted CASM (which excludes fuel expense, the cost of ground packages at Air Canada Vacations and special items) to increase 1.5 to 2.5 per cent when compared to the fourth quarter of 2017.

Air Canada now expects full year 2018 adjusted CASM to range between no increase to an increase of 0.75 per cent when compared to the full year 2017, instead of the range of a decrease of 0.5 per cent to an increase of 1.0 per cent projected in Air Canada’s July 27, 2018 news release.  Approximately 0.75 percentage points of this range are driven by non-recurring costs for branding initiatives and new uniforms, customer service and technology investments, accelerated depreciation and sale-leaseback rent expense for Embraer 190 aircraft, and 2018 start-up costs of approximately $10 million related to Air Canada’s new loyalty program scheduled to launch in 2020.

Additional Guidance

For the full year 2018:

Depreciation, Amortization and Impairment Expense

Air Canada continues to expect depreciation, amortization and impairment expense to increase by approximately $125 million from the full year 2017.

Employee Benefits Expense

Air Canada continues to expect employee benefits expense to increase by approximately $75 million from the full year 2017.

Aircraft Maintenance Expense

Air Canada now expects aircraft maintenance expense to increase by approximately $95 million from the full year 2017, as opposed to the increase of $90 million projected in Air Canada’s news release dated July 27, 2018.

2018 Outlook – Major Assumptions:  Assumptions were made by Air Canada in preparing and making forward-looking statements. As part of its assumptions, Air Canada assumes continued relatively modest Canadian GDP growth for the fourth quarter and full year 2018. Air Canada also expects that the Canadian dollar will trade, on average, at C$1.30 per U.S. dollar in the fourth quarter and at C$1.29 per U.S. dollar for the full year 2018 and that the price of jet fuel will average 86 CAD cents per litre in the fourth quarter and 81 CAD cents per litre for the full year 2018.

The following table summarizes the above-mentioned outlook for the fourth quarter and the full year 2018 and related major assumptions:

Full Year 2018


Approximately 16%


Approximately 12%

Free Cash Flow

$500 – $600 million

Fourth Quarter 2018 versus

Fourth Quarter 2017

Full Year 2018 versus

Full Year 2017

Adjusted CASM

Increase of 1.5% to 2.5%

Range between no increase to an
increase of 0.75%

Depreciation, Amortization and
Impairment Expense

Increase by $125 million

Employee Benefits Expense

Increase by $75 million

Aircraft Maintenance Expense

Increase by $95 million

Major Assumptions

Fourth Quarter 2018

Full Year 2018

Canadian GDP

Relatively modest growth

Relatively modest growth

Canadian dollar per U.S. dollar



Jet fuel price – CAD cents per litre



The outlook provided constitutes forward-looking statements within the meaning of applicable securities laws and is based on a number of additional assumptions and subject to a number of risks.  Please see section below entitled “Caution Regarding Forward-Looking Information”.

(1) Non-GAAP Measures

Below is a description of certain non-GAAP measures used by Air Canada in an effort to provide readers with additional information on its financial and operating performance. Such measures are not recognized measures for financial statement presentation under GAAP, do not have standardized meanings, may not be comparable to similar measures presented by other entities and should not be considered a substitute for or superior to GAAP results.  Readers are advised to review the section entitled Non-GAAP Financial Measures in Air Canada’s Third Quarter 2018 MD&A for a further discussion of such non-GAAP measures and a reconciliation of such measures to Canadian GAAP.

  • Adjusted net income (loss) and adjusted earnings (loss) per share – diluted are used by Air Canada as a means to assess the overall financial performance of its business without the after-tax effects of foreign exchange gains or losses, net financing income (expense) relating to employee benefits, mark-to-market adjustments on derivatives and other financial instruments recorded at fair value, gain on sale and leaseback of assets, gains or losses on debt settlements and modifications, gains or losses on disposal of assets, and special items as these items may distort the analysis of certain business trends and render comparative analysis to other airlines less meaningful.  Starting as of and including the fourth quarter of 2017, adjusted net income (loss) is determined net of tax.
  • Adjusted pre-tax income (loss) is used by Air Canada to assess the overall pre-tax financial performance of its business without the effects of foreign exchange gains or losses, net financing income (expense) relating to employee benefits, mark-to-market adjustments on derivatives and other financial instruments recorded at fair value, gain on sale and leaseback of assets, gains or losses on debt settlements and modifications, gains or losses on disposal of assets, and special items as these items may distort the analysis of certain business trends and render comparative analysis to other airlines less meaningful.  Air Canada uses adjusted pre-tax income (loss) before interest to determine return on invested capital.
  • EBITDAR is commonly used in the airline industry and is used by Air Canada as a means to view operating results before interest, taxes, depreciation, amortization, impairment and aircraft rent as these costs can vary significantly among airlines due to differences in the way airlines finance their aircraft and other assets.  Air Canada excludes special items from EBITDAR as these items may distort the analysis of certain business trends and render comparative analysis to other airlines less meaningful.
  • Adjusted CASM is used by Air Canada as a means to assess the operating and cost performance of its ongoing airline business without the effects of fuel expense, the cost of ground packages at Air Canada Vacations® and special items, as such expenses may distort the analysis of certain business trends and render comparative analysis to other airlines less meaningful.  Aircraft fuel expense is excluded from operating expense results as it fluctuates widely depending on many factors, including international market conditions, geopolitical events, jet fuel refining costs and Canada/U.S. currency exchange rates.  Air Canada also incurs expenses related to ground packages at Air Canada Vacations® which some airlines, without comparable tour operator businesses, may not incur.  In addition, these costs do not generate ASMs and therefore excluding these costs from operating expense results provides for a more meaningful comparison across periods when such costs may vary.
  • “Leverage ratio” refers to adjusted net debt to trailing 12-month EBITDAR leverage ratio and is commonly used in the airline industry and is used by Air Canada as a means to measure financial leverage.  Leverage ratio is calculated by dividing adjusted net debt by trailing 12-month EBITDAR (excluding special items). As mentioned above, Air Canada excludes special items from EBITDAR results (which are used to determine leverage ratio) as these items may distort the analysis of certain business trends and render comparative analysis to other airlines less meaningful.
  • Free cash flow is commonly used in the airline industry and is used by Air Canada as an indicator of the financial strength and performance of its business, indicating the amount of cash Air Canada is able to generate from operations and after capital expenditures.  Free cash flow is calculated as net cash flows from operating activities minus additions to property, equipment and intangible assets, and is net of proceeds from sale-leaseback transactions.
  • Return on invested capital (ROIC) is used by Air Canada as a means to assess the efficiency with which it allocates its capital to generate returns. Return is based on adjusted pre-tax income (or loss, as applicable), excluding interest expense and implicit interest on operating leases. Invested capital includes average year-over-year long-term debt, average year-over-year finance lease obligations, average year-over-year shareholders’ equity, net of excess cash not required to run its core business operations, and the value of capitalized operating leases (the latter calculated by multiplying annualized aircraft rent by 7).  Air Canada calculates invested capital based on a book value-based method of calculating ROIC, as described above.  Refer to the definition of adjusted pre-tax income (loss) for a discussion as to why Air Canada uses adjusted pre-tax income (loss) to assess the overall pre-tax financial performance of its business.

Air Canada’s Third Quarter 2018 Interim Unaudited Consolidated Financial Statements and Notes and its Third Quarter 2018 Management’s Discussion and Analysis of Results of Operations and Financial Condition are available on Air Canada’s website at, and will be filed on SEDAR at

For further information on Air Canada’s public disclosure file, including Air Canada’s Annual Information Form dated March 19, 2018, consult SEDAR at

Air Canada Inaugurates Two New Transborder Routes From Alberta

  • EdmontonLas Vegas 
  • CalgaryPalm Springs

MONTREALOct. 28, 2018 /CNW Telbec/ – Air Canada today launched two new daily, seasonal transborder routes.  Celebrations were held prior to the departure of the inaugural flights from Edmonton to Las Vegas and from Calgary to Palm Springs.

“We are delighted to offer more travel options to Albertans with the addition of daily, seasonal services from both Calgary and Edmonton, which means golf, entertainment and the desert sun are a short flight away every day this fall and winter. With our flexible and diverse North American fleet, we are continuing to strategically add services to popular destinations,” said Mark Galardo, Vice President, Network Planning at Air Canada.

“EIA is very excited to welcome Air Canada Rouge to the Edmonton Metro Region with their inaugural flight to Las Vegas,” said Tom RuthEdmontonInternational Airport President and CEO. “We know Las Vegas is a popular destination for both leisure and business travellers and the addition of this service will increase options for passengers and support strong business ties.”

“Sun-seekers travelling from YYC Calgary International Airport are excited to have another direct link to Palm Springs, California,” said Bob Sartor, the Calgary Airport Authority’s President and CEO. “Working with our partner, Air Canada, we’re creating effortless ways to enjoy the stunning Coachella Valley.”

The Edmonton to Las Vegas and Calgary to Palm Springs flights are onboard Air Canada Rouge A319 and Air Canada A320 aircraft respectively, both offering premium and economy cabins.

Flights are timed to connect with Air Canada’s extensive domestic schedule, provides for Aeroplan accumulation and redemption, Star Alliance reciprocal benefits, and for eligible customers, priority check-in, Maple Leaf Lounge access at Canadian airports, priority boarding and other benefits.







Las Vegas


Air Canada Rouge Airbus A319

Oct 28/18 – Apr 30/19


Palm Springs


Airbus A320

Oct 28/18 – Apr 30/19


What’s the dirtiest surface on an airplane? The result may surprise you

Marketplace analyzed over 100 samples on 18 flights, finding mould, staph and potentially harmful pathogens

Marketplace tested more than 100 samples collected on 18 Porter, Air Canada and WestJet flights, swabbing the seatbelt, tray table, headrest, seat pocket and washroom handle on each trip. (Charlsie Agro/CBC)

Used tampons, sandwiches, loose condoms, smartphones, dirty diapers. What do they all have in common?

Flight attendants tell Marketplace they’ve all been found in the seat pockets of airplanes.

Marketplace’s latest investigation reveals that the surfaces on a plane you’re likely touching most often might not be as clean as you think, and some are contaminated with bacteria and other pathogens.

Marketplace staff took a total of 18 short-haul flights between Ottawa and Montreal, flying with Canada’s three major airlines — Air Canada, WestJet and Porter — at various times throughout the day.

On each flight, the following surfaces were swabbed: seatbelt, tray table, headrest, seat pocket and washroom handle. In total, Marketplace collected more than 100 samples.

Microbiologist Keith Warriner tested the samples gathered by the Marketplace team on 18 short-haul flights between Ottawa and Montreal (Norman Arnold/CBC)

Those samples were then analyzed at a lab at the University of Guelph by microbiologist Keith Warriner, who tested the samples for a number of different types of bacteria, as well as yeast, mould, E. coli and other pathogens.

“I was really amazed about how much we actually recovered from them,” said Warriner.  “Some of them more scary than others.”

Nearly half of the surfaces swabbed contained levels of bacteria or yeast and mould that could put a person at risk for infection, Warriner said.

Yeast and mould were detected on the majority of the 18 flights, which Warriner said suggests that the surfaces were either not cleaned well or often enough.

The most contaminated surface on the plane was the headrest.

The most concerning finding for Warriner was E. coli bacteria detected on both the seat pocket and the headrest. The presence of E. coli indicates fecal contamination, and the bacteria can cause intestinal infections, with symptoms that can include diarrhea, vomiting and abdominal pain.

“We’ve got to try and think how would fecal contamination get inside [the seat pocket],” said Warriner.


‘It’s mostly for esthetics’

Connor Remus has a pretty good idea how a seat pocket might have come into contact with feces. The former Porter employee said he has found used diapers and other trash in seat pockets before.

“Everything goes in there; everything from the paper-thin vomit bags, to used wrappers…. I found used tampons in seat pockets before.”

Marketplace spoke to more than a dozen former flight attendants and customer service representatives about their experiences working on airplanes. Most said it was their responsibility to clean the planes between flights, but that there simply wasn’t enough time to properly disinfect an entire aircraft.

Former flight attendants describe a few reasons to avoid the seat pocket on an airplane:

Beware of dirty diapers: Former flight attendants share secrets from the sky

00:00 01:00

Three former flight attendants describe a few reasons to avoid the seat pocket on an airplane. 1:00

The reality, said Stéphane Poirier, who previously worked for WestJet, is that staff typically have less than 15 minutes to turn a plane around. “We had no time to wash the table or clean everything perfectly.”

There’s also no time between flights for staff to use cleansers or antibacterial spray, he said, noting cleaning solutions are often not allowed on board.

“We don’t have rags, we don’t have spray on board,” said Poirier. “Lots of [cleaners] are a dangerous good … so it’s either water from the aircraft, or a napkin.”

Any cleaning that does happen, said Remus, is often totally superficial. “It definitely was not a huge priority. And when it was a priority, it wasn’t necessarily for cleanliness, it was for an esthetic purpose.”

Bacteria found on contact surfaces

The levels of staph and mould Marketplace found on tray tables is evidence that the surface hasn’t been cleaned for some time, according to microbiologist and self-proclaimed “germ guy” Jason Tetro.

Travellers should pay particular attention to the tray-table result, he said, because it likely includes a kind of staph that may cause skin and soft-tissue infections, such as boils.

A sample shows the presence of mould, which was found on a blanket. (Jenny Cowley/CBC)

“If you’re coming into contact with high levels of staphylococcus aureus, such as what you’re seeing here, then you definitely are at a higher risk of having something go wrong,” Tetro said.

Tetro suggests air passengers avoid putting their faces down on the tray table to sleep, and never placing food directly on the table surface before putting it in their mouths, as ingesting or inhaling staph can be especially harmful.

Even ‘germ guy’ went ew!

For Tetro, who works in infection control, the headrest results were the biggest surprise.

“I was shocked. Honestly, I have looked at planes, and I travel so much on planes, I’m aware of so many of the different places [where germs could be found],” he said. “But then I saw what you showed me with the headrest. And even I, the germ guy, went ‘ew.'”

The levels of staph and mould Marketplace found on tray tables is evidence that the surface hasn’t been cleaned for some time, according to microbiologist Jason Tetro. (Dave Macintosh/CBC)

Hemolytic bacteria, mainly associated with strep throat, found on one headrest was especially concerning for Tetro, as was the presence of staph on that surface.

“It really is about ingestion or inhalation,” said Tetro. “If you happen to have this on a headrest, and you’re moving your head back and forth, then there’s a very good likelihood that you could potentially be inhaling this or getting it into close enough contact that it could get into you.”

Tetro added that it can also get into wounds. “If you have acne and you’re touching your face all the time, you could get something called impetigo, you could get cystitis,” he said.

Marketplace’s samples were analyzed at a lab at the University of Guelph. (Jenny Cowley/CBC)

And it’s important to note that if staph and mould is found living on these surfaces, other microbes can live there too, he said.

“It tells you that there’s not a sufficient amount of cleaning going on; yeast and mould are tougher to clean than bacteria,” Tetro said.

Marketplace also tested the blankets offered to passengers from two of the carriers: Air Canada and WestJet. (Porter didn’t offer a blanket.) The yeast, mould and high counts of bacteria on the WestJet blanket surprised Warriner.

Lab testing on this WestJet blanket showed yeast, mould and high counts of bacteria — surprising as it came in a cellophane wrapper. The airline said it was concerned by the finding, as all of its blankets are sold new and come sealed, straight from a distributor. (Andy Hincenbergs/CBC)

“What was worrying was this was in a cellophane wrapper,” he said. “It shouldn’t have been used.”

When Marketplace reached out to WestJet about these results, the airline said it was concerned by the findings.

“We are looking into this matter further, as all blankets sold on our flights are new (not previously used) and come sealed straight from the distributor,” the company said in an email.

Airlines respond

The only time a plane gets a proper cleaning is when it is not in service, according to the former airline employees.

All three airlines declined to be interviewed but did respond to emailed questions. Air Canada, WestJet and Porter all said they follow Canadian and international cabin-grooming rules.

These samples show the presence of E. coli, which was detected on both the headrest and the seat pocket. The presence of E. coli indicates fecal contamination, and the bacteria can cause intestinal infections. (Jenny Cowley/CBC)

In its response, Air Canada pointed to a study that it says proves hygiene on airlines is dirty, but no more dirty than any other public space. The study was funded in part by Boeing, the world’s largest airplane manufacturer.

WestJet said it was concerned by the findings, but that staff do their best, given the fact that planes are public spaces. The company said its planes are cleaned daily, noting that aircraft are given a light groom after every flight, a full groom every 24 hours, a complete interior detail monthly, and an enhanced, hyper-focused groom every year.

Porter said the company is confident about its efforts to keep passengers and staff safe. Porter also said that when an aircraft is done flying for the day, teams clean the interior from nose to tail, as well as carry out an intensive cleaning every three weeks.

Tetro advises that airline passengers need to take cleanliness matters into their own hands. He suggests travellers wipe down the surfaces they’re going to touch and always carry hand sanitizer with enough alcohol to actually kill germs.

“Fifteen seconds on your hands, 30 seconds on surfaces, and you’re good to go,” said Tetro.

Air Canada is acquiring four A330s

Air Canada has just revealed an interesting fleet update for 2019.

In 2019, Air Canada will acquire four Airbus A330s. All four of these planes are being acquired from TAP Air Portugal, which actually acquired these planes from Singapore Airlines in 2017. However, with TAP Air Portugal taking delivery of A330-900neo aircraft over the coming months, they’ll no longer need these A330s.

These A330s will feature Singapore Airlines interiors, meaning that they’ll have angled seats in business class. We’re not talking about a mild angled either, but rather quite a steep angle.

The style of business class seats on these planes (though this is a Fiji Airways cabin)

The plan is for the first of these planes to enter service with Air Canada in the second quarter of 2019. The plane will immediately feature the new livery, but won’t have the interiors updated until the end of 2019.

Logically you might be thinking “well that seems like an awful business class product, given that Air Canada otherwise has direct aisle access from every seat.” That’s indeed the case, so until these planes are reconfigured, Air Canada will simply sell these business class seats as premium economy, which is a treat.

For example, this is already scheduled for one route — Montreal to Algiers shows as being operated by this A330 as of June 6, 2019.

As you can see based on the seatmap, premium economy books into the business class cabin (and for an extra $27 over economy, that’s a very good deal):

Air Canada is reconfiguring all A330s

The above raises the question of how these A330s will be reconfigured. As it stands, Air Canada has reverse herringbone seats on all of their 787s and 777s.

Air Canada reverse herringbone business class

Meanwhile their A330s and 767s feature herringbone seats in business class.

Air Canada herringbone business class

Towards the end of 2019, Air Canada plans to start reconfiguring all A330s with reverse herringbone seats. This will include the four A330s being acquired from TAP Air Portugal/Singapore Airlines.

Air Canada is retiring mainline 767s

This might bring up the question of why Air Canada is acquiring four A330s. It’s because Air Canada plans to retire their existing fleet of 767s. As of now the airline has six of these in their mainline fleet, and in 2019 they’ll be retiring these planes.

Meanwhile 767s continue to be the plane that Air Canada uses for longhaul flights on their Rouge subsidiary.

Air Canada Rouge 767 cabin

Bottom line

Overall I’d consider this to be good news, both in the short term and long term. Air Canada will have a more consistent fleet, as they eliminate mainline 767s in favor of some extra A330s.

In the short term, premium economy passengers will be getting an excellent product. In the long term, all A330s will feature reverse herringbone seats in business class, which is excellent.

Air Canada To Open New Facility For Ground Support Equipment Services And Cargo At Edmonton International Airport

  • 50,000 square-foot (4,645 square metres) building scheduled to open in September 2019

EDMONTONOct. 25, 2018 /CNW Telbec/ – Air Canada broke ground today for a new facility that will house its ground support equipment service and cargo teams at Edmonton International Airport (YEG), allowing the airline to further enhance its operational capabilities and reinforcing the airline’s commitment to Alberta’s capital city.

The 50,000 square foot (4,645 square metres) building will be constructed by Terracap Group. Air Canada has signed a 15-year lease for the multi-tenant facility, representing an investment of $19 million by the airline over the term of the lease.

Air Canada’s Ground Support Equipment team will utilize 30,000 square feet (2,787 square metres) of the new facility, while Air Canada Cargo will occupy the remaining 20,000 square feet (1,858 square metres). The new facility is expected to open in September 2019.

“We look forward to this new facility at Edmonton International Airport which will support two of our important operations comprising ground support services and cargo.  The new building means our Edmonton ground support equipment team can continue ensuring the approximately 167 vehicles and motorized ground support equipment Air Canada operate at the Edmonton International Airport are maintained to the highest safety, environmental and operational standards in a modern facility,” stated Kevin Howlett, Senior Vice President, Regional Markets & Government Relations.  “Additionally, Air Canada Cargo has significant business in Alberta and Western Canada, and with air freight and logistics being a rapidly growing sector, we have a strong focus on infrastructure improvement across our network.  Our goal is to provide world-class service and a brand-new facility goes a long way in creating an enhanced experience for our customers and for our employees.”

The new facility will include five spacious maintenance bays to facilitate the upkeep of Air Canada’s approximately 167 airport vehicles in use at Edmonton International Airport, comprising pushback tugs to bag tractors and other vehicles. The building has separate, dedicated areas for maintaining an ever-increasing fleet of baggage carts and container dollies, as well as for welding and machining operations and enables equipment painting year-round regardless of the season.  Other features include a dedicated area for electricians to carry out specialized electrical repairs and a training room that will support continuous learning by keeping mechanics current with the latest technology. Air Canada will continue to meet environmental requirements efficiently through a dedicated area to effectively handle hazardous materials.

The new building will also provide modern, upgraded facilities for Air Canada Cargo which will enable the integration of technology infrastructure and enhanced space usage for the optimal flow of goods. In 2017, Air Canada Cargo handled 3.2 million kilograms of goods, including pharmaceuticals, mail, art, and oil and gas industry equipment through its Edmonton cargo facility.

“By growing its investment at the Edmonton International Airport, Air Canada is demonstrating confidence in the Edmonton Metropolitan Region and its competitiveness as part of the airline’s extensive global network,” said Don Iveson, Mayor of Edmonton

“Air Canada is a strong partner,” said Tom RuthEdmonton International Airport President and CEO. “In addition to their San Francisco and Las Vegas route expansions from Edmonton International Airport this year, they are further committing to the Edmonton Metro Region with their investment into this new facility, helping to grow our airport and our Airport City.”

“The Terracap Group of Companies prides itself on its relationship with great tenants, so we are more than fortunate to be able to construct a new state-of-the-art building for Air Canada. The airline has been such an integral part of the airline industry in Canada, so we are very proud to be a part of such a great initiative at the Edmonton International Airport and look forward to building on the relationship with Air Canada and the team at the Edmonton International Airport,” said Larry Krauss, President and CEO of the Terracap Group of Companies.

This fall from Edmonton, Air Canada will offer more than 290 flights each week (up to 44 daily flights) to 12 destinations (14 in winter) in North America, including one daily flight to Las Vegas which will launch on October 28, and the daily non-stop flights to San Francisco which began earlier this year. The carrier will offer an average of 1,770 additional seats per week from Edmonton International Airport this fall and winter, when compared to the same period last year.

Air Canada Welcomes the Launch by the City of Montreal of The Cabinet Créatif de Montréal in Support of Small Business Development Programs

Air_Canada_LogoMONTREALOct. 25, 2018 /CNW Telbec/ – Air Canada is proud to partner with the City of Montreal in launching The Cabinet Créatif de Montréal, a dedicated initiative to support the growth of small and medium enterprises (SMEs). The project will focus on providing coaching and training related to core business competencies including planning successful business trips to stimulate national and international expansion.

Air Canada, the City of Montreal and its leading incubators, accelerators and service providers such as Lune Rouge, La Piscine, MT Lab, PHI Centre, Ecole des Entrepreneurs, Infopresse and WeWork collaborated to develop multi-faceted initiatives that will emphasize the importance of international expansion, as well as the planning of commercial missions to develop new business opportunities.

“As a global airline, we understand the complexities and necessities required to drive international growth. International expansion is an important phase in the evolution of a company’s life cycle. Our objective with this collaborative project is to provide SMEs with the tools and mentorship needed to position their business outside of their local market. While currently available only in Montreal, we hope to expand this project nationally,” said John Macleod, Vice President, Global Sales and Alliances at Air Canada

“As part of its 2018-2022 Economic Development Strategy, the city has taken action to accelerate the growth of our collective wealth in an inclusive and sustainable way. The Cabinet créatif is one of the initiatives that will enable creative and cultural businesses to consolidate their achievements locally, and to gain international outreach. This represents an unprecedented opportunity for our small and medium-sized businesses to position themselves in every respect. I would like to thank all private and public partners who join forces with us to support this flagship economic sector of our metropolis,” said Montreal Mayor Valérie Plante.

A total of 15 local SME’s will be selected to participate in an innovative 5-month project. In addition to training, support and coaching in commercial development, the accelerator project will offer over 25 hours of mentorship in market and export development plans,10 hours of free legal consultation, a market research guide, a day with Infopresse and a psychometric exam guide to assist with the talent acquisition process.

The curriculum will help companies plan their growth strategy, target and tailor their products to desired markets and provide insight into the options related to their business travel all with the goal of growing their business.

Businesses wishing to take part can apply online until November 23 at, with the 15 finalists announced in January 2019 at the Expo Entrepreneurs forum in Montreal.

About Air Canada for Business

Air Canada for Business is a free program designed for small and medium-sized companies to help them save on business travel, earn rewards and enjoy exclusive member offers every time they book with Air Canada and select partner airlines. The program offers a convenient tool for booking business travel. Users can book business travel, reserve cars and manage and share itineraries for multiple employees, all while keeping track of both travel expenses and program rewards in real-time. It’s free to join online and requires no minimum spend or commitment.

Air Canada Partners with Winding Tree on a Blockchain-based Travel Distribution Platform

MONTREALOct. 24, 2018 /CNW Telbec/ – Air Canada today announced it has signed a letter of intent to participate in a blockchain-based, decentralized open-source travel distribution platform being developed by the Swiss start-up, Winding Tree.

The complexity of the current travel distribution landscape can deter new entrants and innovation in the distribution and sale of air travel products. Winding Tree intends to address this complexity by developing a decentralized, open-source platform for travel distribution to provide greater access to inventory directly from suppliers.

“We are pleased to be participating with Winding Tree in this innovative project for a new travel distribution channel,” said Keith Wallis, Director of Global Product Distribution for Air Canada. “As Canada’s largest airline, and a global leader in innovative airline distribution solutions, Air Canada recognizes the importance of leveraging this next generation technology. We plan to integrate Air Canada’s Direct Connect API with Winding Tree’s public blockchain platform, giving blockchain-savvy users the ability to access our content directly from the source.”

“As the first North American carrier to work with Winding Tree’s public blockchain platform, Air Canada is showing itself to be a real leader in innovation,” said Pedro Anderson, Founder and Chief Operating Officer of Winding Tree. “We are excited to have their valuable collaboration in creating the ideal developer experience and their ongoing feedback along the way as we build an open environment for travel distribution.”