Air Canada adds routes due to rising demand

VANCOUVER – Air Canada will add seven U.S. cities to its spring flying schedule, the country’s top carrier said on Wednesday, in a sign the air travel industry is inching its way out of last year’s bruising downturn.

Airlines typically announce new routes for the busy spring period early in the new year, but analysts said if travel demand was still falling Air Canada would likely not be adding new flight destinations.

“They have enough hope that demand has come back sufficiently,” said Genuity Capital Markets airline analyst David Tyerman.

Air Canada, which narrowly avoided having to file for bankruptcy protection last spring under the strains of a heavy debt load, cut back some U.S. routes during the 2009 economic recession.

WestJet Airlines, the main domestic rival to Air Canada, said last week said it is encouraged by early signs of economic recovery and an improvement in traffic.

But the low-cost carrier said it remained cautious of a double-dip in the economy and will work at conserving funds, cutting costs and managing capacity.

The global airline industry last year experienced its worst decline in passenger demand in history, the International Air Transport Association said on Wednesday.

For the full year, demand from travelers fell 3.5 percent although December showed an improvement with demand up 4.5 percent year on year. U.S. airlines have recently reported signs of improved demand especially from business travelers.

Canada’s two biggest airlines are well-placed and well-capitalized for an airline sector recovery after both raised capital last year, said Rick Erickson, an independent airline industry analyst.

“The Air Canada ship looks pretty steady in waters that are starting to calm. The largest part of the storm has passed … WestJet has an even stronger balance sheet,” Erickson said.

Starting in June, Air Canada, the world’s 13th largest commercial airline, will offer daily nonstop flights between between Toronto and San Diego, California; Portland, Oregon; Memphis, Tennessee; Cincinnati, Ohio; Portland, Maine; and Syracuse, New York. It will launch a Toronto-Orange Country, California, flight in April.