Air Canada expects fall revenue boost as premium passengers avoid summer heat

Air Canada’s AC-T revenue for September and October is likely to break records for the two months as more premium travellers avoid the heat and summer crowds in Europe and Japan, a senior executive said.

Large North American airlines have increasingly built their business in recent years around premium travellers, corporate accounts and loyalty program members, betting those customers are slower to pull back when fares rise.

Increased demand for corporate flying in autumn combined with shifting travel patterns among premium leisure passengers are lifting executives’ expectations for seasons once considered slower than peak travel months like July and August.

“We anticipate that September and October will probably be the strongest September and October from a revenue perspective that the company’s ever had,” Air Canada chief commercial officer Mark Galardo said in an interview on Thursday.

“We’ve seen tremendous growth in demand for people travelling business class to go to Italy, Spain, France, the Mediterranean in general, Japan,” he added. “And typically, these customers avoid the summer peak.”

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U.S. carriers like Delta Air Lines DAL-N and United Airlines UAL-Q have also reported seeing shifting travel patterns drive more demand in autumn, particularly for lucrative European destinations.

Record heat, droughts and wildfires have affected large parts of Europe this summer, and the lack of widespread air-conditioning in some destinations has made them less attractive for tourists. Japan has also had very hot days with temperatures above 40 degrees C.

Galardo said the shift among premium travellers to flying more in spring and autumn, which began two or three years ago, had accelerated, and was even showing up a little in November.

Air Canada, however, has not seen a similar change in the travel pattern of budget passengers.

“That shift to the fall season is really a story of premium,” Galardo said.

The change has already led Air Canada to add flights to European leisure destinations like Sicily and Mallorca and there will be more to come as the carrier takes delivery of new aircraft next year, Galardo said.

“We’re expecting that the fall and spring seasons will be significant contributors to these new routes,” he said.

It has led Air Canada to work on a maintenance strategy that would allow the carrier to better balance the seasonality, such as by bringing some planes in the shop in the summer to free them up for September.