Highlights

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1. In 2008, Canadian Level I and II air carriers reported over 55 million enplaned passengers in their scheduled and charter operations, an all-time high, up 4.3% from 2007, continuing the upward trend that began in 2004. The scheduled passenger counts reached 51.5 million and the charter passenger counts, 3.8 million. The scheduled passenger counts reached an all-time high (13.7 million) in the third quarter of 2008. In terms of passenger-kilometres flown, these carriers recorded 129.4 billion passenger-kilometres in their scheduled and charter operations in 2008, also an all-time high, up 3.0% from the previous year.
2. In 2008, Canadian Level I and II air carriers reported a slight improvement in their scheduled passenger load factor (a measure of the fullness of their aircraft) compared to 2007. The passenger load factor improved from 80.3% in 2007 to 80.8% in 2008, as the demand, as measured by passenger-kilometres, advanced at a slightly faster pace (+2.3%) than the supply (capacity), as measured by available seat-kilometres (+1.7%). The passenger load factor on scheduled flights reached an all-time high (82.8%) in the third quarter of 2008—largely due to a stronger decrease in capacity than in demand; in the same quarter in 2007, it had reached 81.8%. The capacity continued to decline (-5.5%) in the fourth quarter of 2008 due to the economic downturn—emanating from global financial market crisis—that started to impact Canada (and the world) in the second half of year.
3. In 2008, the total operating revenues operated by the Canadian Level I and II air carriers amounted to $16.2 billion, up 7.4% from 2007, continuing the upward trend that began in 2004. The growth in operating revenues (passenger revenues accounted for 89.1% of total operating revenues in 2008) can be mainly tied to increases in both fares and fuel surcharges as a result of increased fuel prices. The total operating expenses increased to $15.7 billion in 2008, up 13.0% over the previous year. These carriers reported an operating income in all quarters of 2008. However, decreases in operating income in the last three quarters of 2008 yielded an annual drop of 59.1% in 2008 compared to 2007. The rising cost of fuel and employment coupled with virtually unchanged load factor helped to explain the decrease in the operating income in 2008.
4. Canadian Level I and II air carriers reported a net loss of $760.4 million, a deterioration from the $868.3 million profit recorded in 2007. This represented the first net loss since 2004 and it was largely due to non-operating expenses—primarily the foreign exchange volatility—in the second half of 2008.
5. Between the first quarter of 2008 and the fourth quarter of 2008, 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 0.93 in the third quarter and 1.00 in the fourth quarter. Overall, this means that the Canadian Level I and II air carriers made 7.0 cents of profit for every dollar spent in the third quarter of 2008 and nil profit in the fourth quarter of 2008.
6. Between the first quarter of 2008 and the fourth quarter of 2008, 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 second quarter (2.9%). This shows that every dollar of service sold earned 2.9 cents of profit for the Canadian Level I and II air carriers. In the three other quarters, the Canadian Level I and II air carriers posted losses, the profit margin ranging from -0.8% in the third quarter to -18.3% in the fourth quarter. The negative results reflected the increases in operating expenses (aircraft operations—fuel cost and salaries and wages) and non-operating expenses (net miscellaneous non-operating expenses), which offset the gains in operating revenues.
7. In 2008, the operating revenue per employee varied from $101,552 in the fourth quarter to $128,956 in the third quarter. This employee productivity measure showed quarterly year-over-year increases from 2007 to 2008, with the exception of the fourth quarter, the gains ranging from 0.8% in the third quarter to 5.7% in the first quarter. In the last quarter of 2008, the operating revenue per employee declined 5.0% from the previous year. 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 2008 bettered the previous year level only in the first quarter (+1.0%). Again, the worst result was registered in the fourth quarter (-11.8%). As for the previous year, the tonne-kilometres flown per employee were higher in the third quarter, at 114,421.
8. Total employment reported by Canadian Level I and II air carriers rose in each quarter of 2008 compared to the previous year, the gains ranging from 4.9% in the third quarter to 7.8% in the fourth quarter. The string of quarterly year-over-year increases for total wages and salaries paid by Canadian Level I and II air carriers that began in the fourth quarter of 2005 continued in each quarter of 2008.