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Originally Posted by Bigtime
Not bad. What the heck happened on the international front?
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A lot of the international front can be attributed to Sun destination weakness. As was documented in the Westjet earnings call yesterday, Sun destination flying is taking a hit as hotels and excursions are priced in USD. Westjet Vacations revenue management has the ability to fluctuate the cost of all inclusive vacations to account for adjustments in USD exchange rates. As stated on the call this revenue management feature is being used extensively.
Also on the WJA.T call, the airline is redirecting capacity from transborder and sun destination to the domestic market. Growth in the domestic market will double from 3% to 6% with a corresponding decrease in US and Sun flying.
Of the 5% decline, it appears that AC FRA down gauge was responsible for 1 basis point.
Also, there is a big battle going on for USA to Europe, so some traffic is going YYC-USA-Europe rather than going on the nonstop YYC-Europe. Example YYC-DFW-LHR on AA and BA is cheaper the YYC-LHR n/s BA.
A the end of the day, growth is growth; we should look too much at individual segment activity.