The erosion in Air Canada’s business-class revenue is becoming less severe, sparking hope that the travel market is finally on the mend.

“The worst of the worst seems to be behind us,” Air Canada chief executive officer Calin Rovinescu said during a conference call yesterday, after announcing a profitable third quarter due to foreign-exchange gains. “We’re seeing sprouts of green coming up from the earth. ”

In the third quarter, Canada’s largest carrier saw its revenue from premium travellers decrease 16 per cent from the same period in 2008, marking an improvement from the 30-per-cent decline for the second quarter.

The airline was able to lure back some corporate travellers in the third quarter after introducing a lower-priced ticket for its “Executive Class” category earlier this year. The reduced fares in the premium cabin carry restrictions such as advance purchase and minimum stay periods.

In combatting weak travel demand, Montreal-based Air Canada has spruced up service in business class, offering more choices for meals and new amenity kits.

Mr. Rovinescu expects corporate travel budgets to gradually loosen up, but cautioned that it could take until mid-2011 before there is full recovery.