Highlights

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1. In 2006, Canadian Level I and II air carriers reported nearly 47 million enplaned scheduled passengers, up 9.5% from the previous year. The scheduled passenger counts reached an all-time high (12.9 million) in the third quarter of 2006. In terms of passenger-kilometres flown, these carriers recorded 31.4 billion passenger-kilometres in their scheduled operations in that quarter, also an all-time high.
2. After experiencing a net loss of just under $1.0 billion in 2004, Canadian Level I and II air carriers returned to profitability in 2005, with a recorded net income of approximately $160 million. In 2006, the net income reported by these carriers rose by nearly 70.0% compared to 2005. In both the second and third quarters of 2006, Canadian Level I and II air carriers reported net income of over $200 million.
3. Between the first quarter of 2005 and the fourth quarter of 2006, the operating ratio (it displays the carrier's ability to meet its short-term obligations and represents the proportion of operating revenue absorbed by operating expenses) hovered between 0.88 in the third quarter of 2005 and 1.00 in the first quarter of 2006. Overall, this means that the Canadian Level I and II air carriers made 12.0 cents of profit for every dollar spent in the third quarter of 2005 and nil profit in the first quarter of 2006.
4. Between the first quarter of 2005 and the fourth quarter of 2006, the highest profit margin (it indicates the profit margin earned by revenue dollar and is obtained by dividing net income by operating revenue – this ratio is expressed as a percentage) was recorded in the third quarter of 2005 (10.0%). This shows that every dollar of service sold earned 10.0 cents of profit for the Canadian Level I and II air carriers. The result for the fourth quarter of 2005 (-4.5%) reflected the increases in operating expenses (aircraft operations – fuel cost and salaries and wages – and general services and administration) and non-operating expenses (capital losses, interest expenses and net miscellaneous non-operating expenses), which offset the gain in operating revenues.
5. In 2006, the operating revenue per employee varied from $103,224 in the fourth quarter to $122,809 in the third quarter. This employee productivity measure showed quarterly year-over-year increases from 2005 to 2006, the gains ranging from 2.9% in the third quarter to 11.1% in the first quarter. Another yardstick used to measure productivity within the aviation industry is to calculate tonne-kilometres flown per employee. According to this measure, labour productivity in 2006 bettered the previous year level in each quarter, the increases ranging from 2.3% in the third quarter to 13.3% in the first quarter. For both 2005 and 2006, the tonne-kilometres flown per employee were higher in the third quarter, at 120,545 and 123,310, respectively.
6. In 2006, increases in tonne-kilometres flown per litre of fuel consumed occurred in the first three quarters compared to the same quarters in 2005. In the fourth quarter of 2006, they edged down 0.5% from 2005. These results indicated that the Canadian Level I and II air carriers were able to protect themselves partially from the effects of fuel price increases through technological improvements and productivity increases. Between the first quarter of 2005 and the fourth quarter of 2006, productivity for one litre of fuel varied from 2.14 tonne-kilometres in the third quarter of 2005 to 2.72 tonne-kilometres in the first quarter of 2006.