Air Canada's Vancouver to Toronto flight is the world's 10th most profitable airline route

Aug 13 2019, 12:56 pm

The major direct, domestic flight route operated by Air Canada between Vancouver International Airport (YVR) and Toronto Pearson International Airport (YYZ) is still one of the world’s most profitable airline routes.

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According to a new analysis by global air travel data firm OAG, the national carrier’s YVR-YYZ service is the 10th most profitable service in the world, but this represents a drop from last year’s ranking of ninth place.

Their data indicates the total revenue generated by this particular Air Canada route for the period between April 2018 and March 2019 was USD $541 million, down from USD $620 million during the same period in 2017/18.

The list of top 10 busiest flight services remains unchanged from the previous year, but there are slight variations in the ranking.

Interestingly, all but one of the services — Qantas Airways’ Melbourne to Sydney flight, the globe’s second most profitable — saw a profit decrease over the previous year. There were marginal decreases in scheduled flight hours for most of the ranked flights, but this route by Qantas saw an increase in service.

For Air Canada’s YVR-YYZ service, the total scheduled hours dropped relatively significantly from 48,252 hours in 2017/18 to 45,334 hours in 2018/19. Revenue per hour of service also decreased from USD $12,855 to USD $11,936 between the periods of analysis.

John Grant with OAG believes the drop in Air Canada’s route is due to increased competition, including from low-cost carriers.

As well, amongst the services ranked, Air Canada’s revenue per hour for YVR-YYZ is the lowest in the top 10, perhaps due to higher operating costs for airlines in Canada and the lower economies of scale as a result of the smaller aircraft for this medium-range domestic flight.

Just ahead of Air Canada’s YVR-YYZ service is Singapore Airlines’ Sydney to Singapore service (USD $550 million) and Cathay Pacific’s Hong Kong to London service (USD $605 million).

In the United States, two other routes – both also flying west to east across the continent – made the top 10 list: United Airlines’ route from San Francisco International Airport to Newark Liberty International Airport ranked fifth (USD$ 689 million), while American Airlines’ route from Los Angeles International Airport to John F. Kennedy International Airport ranked sixth (USD $662 million), with both seeing a revenue per hour similar to Air Canada’s YYZ-YVR.

The most profitable flight service is British Airways’ New York City John F. Kennedy International Airport to London Heathrow Airport route, with USD $1.159 billion in total revenue based on 42,680 scheduled hours, resulting in USD $27,159 revenue per hour. It is the only service to hit profits above the $1 billion threshold.

“Airline networks, a mix of destinations, some routes operating with high daily frequency and others with once a day service. For every airline there are a small selection of lucrative routes where either competitive advantage, market circumstances or limited competition make for very attractive revenues; they are the routes that are ‘protected’ at all costs,” wrote Grant.

“Interestingly on a revenue per hour basis nine of the top ten routes have seen a reduction suggesting that perhaps the levels of competition both directly from other airlines and indirect routes.”

Air Canada’s YVR-YYZ flight has a travel time of about 4.5 hours when travelling eastbound and roughly five hours for westbound trips due to the jet stream.

There are currently about 16 flights per direction per day, with slight variations in frequency and capacity between seasons. Some of these flights are layovers for Air Canada’s single-stop layover at YVR for the two separate itineraries flying from YYZ to Hong Kong and Sydney Airport (SYD).

Of course, none of this includes the approximate 10 daily, non-stop flights by WestJet between YVR and YYZ.

It remains to be seen how Air Canada’s profits will be impacted by the grounding of the problematic Boeing 737 MAX, which began in March. OAG’s data indicates Air Canada is the second airline in the world to be hit hardest by the grounding in terms of the reduction of seat capacity.

Most profitable flight routes OAG

World’s most profitable airline routes for the 12-month period from April 2018 to March 2019. (OAG)

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Kenneth ChanKenneth Chan

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