Profits in Canada's Air Transportation Industry to Recover Lost Ground This Year



    OTTAWA, March 8 /CNW Telbec/ - Lower fuel prices will allow profits in
Canada's air transportation industry to regain lost ground in 2007, according
to the Conference Board's Canadian Industrial Outlook: Canada's Air
Transportation Industry-Winter 2007.
    "Rising demand among domestic travellers will generate healthy revenue
growth for the industry, but lower fuel prices and smaller increases in labour
costs are the key factors driving the improvement in profits," said Michael
Burt, Senior Economist.
    Canada's air transportation industry profits dropped more than 30 per
cent last year, from $537 million in 2005, to $372 million in 2006. Despite
strong sales and price growth in 2006, fuel and labour costs grew even faster.
Profits are expected to reach $482 million in 2007 and steadily increase over
the next four years.
    Very strong growth in domestic demand has been a key support for the
industry over the past two years. This growth is expected to moderate in 2007,
but will remain strong-more than five per cent per year over the next five
years.
    Travel demand from non-Canadians has been much weaker in recent years.
Confusion over the implementation date of the Western Hemisphere Travel
Initiative and a strong Canadian dollar contributed to a decline in the number
of Americans visiting Canada in 2006. With the implementation of the new
passport rules for air travellers in January expected to further reduce the
number of visitors from the United States, growth from foreign travellers will
remain weak in 2007.
    This is the first release of the Conference Board's new Canadian
Industrial Outlook: Canada's Air Transportation Industry. Published twice a
year, the content for this report was previously included in the Board's
broader tourism industry report.




For further information:

For further information: Brent Dowdall, Media Relations, (613) 526-3090
ext. 448, corpcomm@conferenceboard.ca, www.conferenceboard.ca


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