Air Canada reports 2008 fourth quarter and full year results
Fuel and foreign exchange volatility primary factors in net loss
FOURTH QUARTER OVERVIEW
- Operating loss of $146 million compared to operating income of
$72 million in the fourth quarter of 2007.
- Fuel expense increased $177 million or 29 per cent from the fourth
quarter of 2007.
- Passenger revenue decreased $14 million or 1 per cent from the fourth
quarter of 2007 due to a decline in traffic.
- RASM increased 9.1 per cent from the fourth quarter of 2007, primarily
due to a 6.2 per cent increase in yield but also due to a
2.1 percentage point improvement in passenger load factor.
- Excluding fuel expense, unit cost increased 9.9 per cent from the
fourth quarter of 2007. The impact of a weaker Canadian dollar versus
the US dollar in the quarter was a major contributing factor to the
increase in CASM, excluding fuel expense.
- Net loss of $727 million compared to net income of $35 million in the
fourth quarter of 2007. The net loss for the fourth quarter included
net losses on foreign exchange of $527 million.
- EBITDAR of $108 million, a decrease of $166 million from the same
quarter in 2007.
- Cash, cash equivalents and short-term investments of $1.0 billion at
December 31, 2008.
FULL YEAR OVERVIEW
- Operating loss (before a provision for cargo investigations) of
$39 million compared to operating income of $433 million in 2007.
- Fuel expense increased $867 million or 34 per cent to $3.4 billion in
2008.
- Passenger revenues of $9.7 billion in 2008 increased $384 million or
4 per cent mainly due to increased fares and fuel surcharges to
partially offset significantly higher fuel prices.
- RASM increased 5.3 per cent from 2007, due to a 4.3 per cent growth in
yield and, to a lesser extent, a 0.8 percentage point improvement in
passenger load factor.
- Excluding fuel expense, unit cost increased 1.7 per cent from 2007,
largely due to the higher unit cost of ownership relating to new
aircraft and the fleet refurbishment program.
- Net loss of $1,025 million compared to net income of $429 million in
2007. The net loss for 2008 included net losses on foreign exchange of
$655 million while 2007 included net gains on foreign exchange of
$317 million.
- EBITDAR (before a provision for cargo investigations) of $934 million,
a decrease of $329 million from 2007.MONTREAL, Feb. 13 /CNW Telbec/ - Air Canada today reported an operating
loss of $146 million for the fourth quarter of 2008 compared to operating
income of $72 million in the fourth quarter of 2007, a difference of $218
million. Fuel expense increased $177 million or 29 per cent compared to the
fourth quarter of 2007. A net loss of $727 million in the fourth quarter of
2008 included net losses on foreign exchange of $527 million. This compared to
net income of $35 million in the fourth quarter of 2007 which included net
gains on foreign exchange of $20 million.
Passenger revenues decreased $14 million or 1 per cent from the fourth
quarter of 2007. Air Canada reduced its overall capacity by 7.8 per cent in
the fourth quarter of 2008 compared to the fourth quarter of 2007. Traffic
decreased 5.3 per cent on this capacity reduction resulting in a 2.1
percentage point improvement in system passenger load factor. The decrease in
passenger revenues due to the lower traffic was partly offset by additional
revenues from increased fares and fuel surcharges.
Yield increased by 6.2 per cent from the fourth quarter of 2007,
reflecting yield growth in all markets. The yield improvement was mainly due
to higher fares and increased fuel surcharges and a favourable foreign
exchange impact from foreign denominated revenues. System revenue per
available seat mile (RASM) rose 9.1 per cent compared to the fourth quarter of
2007, due primarily to the growth in yield but also to the passenger load
factor improvement.
Unit cost in the fourth quarter of 2008, as measured by operating expense
per available seat mile (CASM), increased 17.4 per cent largely due to the
significant increase in fuel expense from the fourth quarter of 2007. A
significantly weaker Canadian dollar versus the US dollar when compared to the
fourth quarter of 2007 accounted for approximately 40 per cent of the CASM
increase (including fuel expense) in the fourth quarter of 2008. Excluding
fuel expense, unit cost increased 9.9 per cent from the fourth quarter of 2007
and included higher ownership costs reflecting Air Canada's investment in new
aircraft and the aircraft interior refurbishment program. The capacity
reduction was also a factor in the year-over-year increase in CASM as Air
Canada's cost structure is such that its fixed costs do not fluctuate
proportionately with changes in capacity in the short-term. In addition,
certain variable costs, such as labour, are progressively being reduced,
however, not at the same rate as the capacity reduction.
The net loss for the fourth quarter of $727 million included net losses
on foreign exchange of $527 million and non-cash mark-to-market gains on
financial instruments of $32 million. This compared to net income of $35
million in the fourth quarter of 2007 which included net gains on foreign
exchange of $20 million and a loss on financial instruments of $1 million.
EBITDAR amounted to $108 million, a decrease of $166 million from the fourth
quarter of 2007.
Air Canada reported a loss per share (basic and diluted) of $7.27 on an
unadjusted basis. On an adjusted basis, the airline reported a loss per share
(basic and diluted) of $1.95. Loss per share is adjusted to remove losses on
foreign exchange of $527 million as well as a loss on capital assets of $5
million in the fourth quarter of 2008.
For 2008, Air Canada reported an operating loss (before a provision for
cargo investigations) of $39 million compared to operating income of $433
million in 2007. Fuel expense increased $867 million, or 34 per cent, to $3.4
billion in 2008. Passenger revenues of $9.7 billion in 2008 increased $384
million or 4 per cent mainly due to increased fares and fuel surcharges to
partially offset significantly higher fuel prices. Excluding fuel expense,
unit cost increased 1.7 per cent from 2007. The airline recorded a net loss of
$1,025 million compared to net income of $429 million in 2007. The net loss
for 2008 included net losses on foreign exchange of $655 million and non-cash
mark-to-market gains on financial instruments of $92 million which were
largely related to the fair value of fuel derivatives. The net income recorded
in 2007 included net gains on foreign exchange of $317 million and non-cash
market-to-market gains on financial instruments of $26 million.
"2008 was a year marked by unprecedented volatility in fuel prices,
significant fluctuations in foreign exchange and a worsening global economy,"
said Montie Brewer, President and Chief Executive Officer. "Our fourth quarter
and full year results reflect these challenges. However, we have a well
established track record of adapting to challenges.
"Air Canada's innovative revenue model is performing well and customers
are continuing to embrace our competitively priced, value-driven options. Five
consecutive years of record load factors demonstrate our unwavering focus on
disciplined capacity management to ensure our assets are efficiently deployed
with the objective of eliminating unprofitable flying. We have undertaken
company-wide initiatives to reduce costs and surpassed our 2008 target of $100
million in cost reductions. Nevertheless, the additional value created through
our revenue model and these cost savings initiatives was not enough to offset
an unprecedented 34 per cent increase in fuel costs which added close to $900
million in expenses in 2008 alone.
"Looking ahead, forward bookings are in line with our planned capacity
levels in North America. While we expect the Canadian market to perform well
relative to other markets, we are seeing some weakness on transatlantic
markets, particularly the United Kingdom. Capacity adjustments to date have
been on track and we will continue to follow the market closely, fine tuning
capacity as required. In 2009, we expect the benefits from the decline in fuel
costs to more than offset the decrease in revenues resulting from reduced
demand due to the economic downturn.
"We are presently targeting cost reductions of at least $120 million in
additional savings in 2009 through company-wide cost reduction initiatives
including on-going fuel efficiency improvements and a supplier concession
program. We will also continue to benefit, on both the cost and revenue lines,
from past investments that enable Air Canada to operate the youngest, most
fuel-efficient fleet of any North American network carrier.
"For all these reasons, I am confident in Air Canada's ability to manage
through this challenging environment and I believe we are well positioned to
take full advantage when traffic rebounds with an economic recovery. Beyond
ensuring a competitive revenue model and cost structure, and developing
innovative service offerings, an essential key to our success is the quality
of service we provide to our customers. In this regard, I want our customers
to know that we are always working to do better, and I want to thank our
24,000 employees for their hard work during what has been a challenging year
for Air Canada and the global airline industry.
Pension Update
--------------
Air Canada contributed $456 million to funding its employees' defined
benefit pension plans, of which $189 million represented funding of past
service costs in accordance with Air Canada's agreement with the Office of the
Superintendent of Financial Institutions (OSFI). At December 31, 2008, Air
Canada's pension plans had assets of $9.7 billion of which approximately $9.4
billion was related to Canadian pension plans.
Commenting on the broader pension issues facing Canada, Mr. Brewer said,
"The global financial crisis has caused many large companies with federally
regulated pension plans, including Air Canada, to face significant pension
funding costs. Without appropriate relief by the federal government, other
corrective measures or fundamental changes, these costs will prove
unsustainable. This issue has serious implications for working Canadians and
pensioners. Air Canada remains committed to working with all stakeholders to
protect its pension plan. It is imperative in our view, for the federal
government to make permanent changes to federal pension regulations that would
make pensions more secure and help companies compete more effectively in the
global economy."
Liquidity Update
----------------
Along with many airline carriers globally, Air Canada faced a number of
significant challenges in 2008 relating to historically high and volatile fuel
prices, foreign exchange rates, pension funding obligations, liquidity,
worsening global credit market and economic conditions, and may continue to
face such challenges in 2009. As an important part of its response to these
challenges, Air Canada has embarked on a sustained effort to improve its short
and longer term financial position and liquidity.
In recent months, Air Canada entered into several new financing
arrangements to strengthen the company's financial position. These have
provided aggregate net proceeds of approximately $641 million and, subject to
fulfillment of certain conditions, additional available credit of $50 million
as at December 31, 2008. As previously announced, financing arrangements
consist of: a series of agreements for secured financings with General
Electric Capital Corporation ("GECC") and its affiliates providing up to
US$195 million (approximately $238 million), of which $99 million was received
in December and $92 million was received in January 2009; a secured revolving
credit facility of up to $100 million with the Canadian Imperial Bank of
Commerce ("CIBC") with draw downs being subject to certain conditions, of
which $50 million was drawn as at December 31, 2008 for net proceeds of $47
million (as of February 12, 2009, no amounts were drawn under this facility);
a secured financing transaction with Calyon New York Branch and Norddeutsche
Landesbank Girozentrale for a $143 million loan, of which $97 million was
received in December 2008 and the remaining received in January 2009; an
agreement with Aeroplan to accelerate payments for purchase of seats for the
period from October 2008 to May 2009, in exchange for future credits to be
settled in 2009, whereby cash flows from operations have been favourably
impacted by $63 million as at December 31, 2008; two secured financings
amounting to proceeds of $92 million and $99 million, respectively; and sale
and leaseback arrangements for five Boeing 777 aircraft which generated net
proceeds of $144 million.
Air Canada owns or retains equity in a range of assets, including Boeing
777 aircraft, Embraer aircraft and other assets. Based on current values,
these assets may support additional financings of up to $1 billion. However,
given the current and continuing instability of credit markets and economic
conditions, there can be no assurance that Air Canada will be able, if needed,
to conclude further transactions on acceptable terms, or that Air Canada's
assets will generate the expected proceeds.
As at December 31, 2008, Air Canada had cash, cash equivalents and
short-term investments of approximately $1.0 billion.
2009 Current Outlook
--------------------
With the expectation of a continuing recession in 2009, the industry,
including Air Canada, is expected to continue to face significant challenges
throughout 2009. While lower fuel prices and ongoing monitoring of capacity
should provide some relief, the recession is expected to place significant
pressure on Air Canada's passenger and cargo revenues.
Air Canada expects its full year 2009 system capacity, as measured in
available seat miles (ASM), to decline by between 2.5 per cent and 3.5 per
cent compared to the full year 2008. Full year 2009 domestic ASM capacity is
expected to decline by between 3.0 per cent and 4.0 per cent compared to the
full year 2008. For the first quarter of 2009, due to the continuing economic
downturn, Air Canada now expects its system ASM capacity to decline by between
9.5 per cent and 10.5 per cent compared to the first quarter of 2008 (as
opposed to the system ASM capacity reduction of between 7.0 and 9.0 per cent
for the first quarter of 2009 previously projected in Air Canada's press
release dated November 7, 2008). Air Canada expects its full year 2009 CASM,
excluding fuel expense, to increase between 6.0 per cent and 7.0 per cent
compared to the full year 2008. For the first quarter of 2009, Air Canada
expects CASM, excluding fuel expense, to increase between 13.5 per cent and
14.5 per cent compared to the first quarter of 2008.
The above guidance reflects Air Canada's assumption that the North
American economy will continue to contract in the first quarter of 2009 and
will remain weak for the remainder of 2009. Air Canada also assumes that
Canadian real GDP will be approximately negative 1 per cent and US real GDP
will be approximately negative 2 per cent. In addition, Air Canada expects
that the Canadian dollar will trade, on average, at Cdn $1.18 per U.S. dollar
for the first quarter in 2009 and at Cdn $1.16 per U.S. dollar for the full
year 2009. Air Canada's outlook also assumes that the price of fuel will
average 68 cents per litre in the first quarter of 2009 and will average 69
cents per litre for the full year 2009 (both net of current fuel hedging
positions).
The outlook provided constitutes forward-looking statements within the
meaning of applicable securities laws and is based on a number of assumptions
and subject to a number of risks. Please see section below entitled "Caution
Regarding Forward-Looking Information."2008 Accomplishments
--------------------
- Introduced three Boeing 777-200LR and five Boeing 777-300ER aircraft.
Air Canada is the first North American carrier to operate this latest
generation, fuel-efficient aircraft. To date, Air Canada has taken
delivery of 16 Boeing 777 aircraft, with two remaining aircraft
scheduled to be delivered in 2009, one in each of the first and third
quarters.
- Took delivery of the final three of 45 Embraer E190 aircraft ordered.
Air Canada's North American fleet includes a total of 60 new Embraer
aircraft, with 15 Embraer E175s.
- Completed most of the planned fleet refurbishment comprising a total of
121 narrow and widebody aircraft, with only one Boeing 767-300 aircraft
and seven Airbus A330 aircraft remaining that are scheduled to be
completed by mid-2009.
- Recorded a fifth consecutive year of record load factors. Full year
2008 passenger load factor reached 81.4 per cent versus 80.6 per cent
in 2007. Load factor for the fourth quarter 2008 was 79.9 per cent
versus 77.8 per cent for the same period the previous year.
- Achieved on-time arrivals performance of 79 per cent in 2008, a
5.7 percentage point increase from the previous year, based on Air
Canada's domestic Canada arrivals as measured according to the U.S.
Department of Transportation's standards. On-time domestic arrivals
performance for the fourth quarter was 76.4 per cent, a 0.7 percentage
point increase over the previous year's quarter.
- Announced an agreement in principle with Continental Airlines for a
strategic commercial relationship that would provide expanded network
and frequent flyer benefits for customers of both airlines, in addition
to a multilateral framework agreement with Continental, United Airlines
and Lufthansa to create a transatlantic joint venture, pending
regulatory approvals.
- Concluded an agreement with Brazilian airline TAM, a future Star
Alliance partner, to expand Air Canada's network throughout Brazil on
a codeshare basis via Sao Paulo effective October 30, 2008.
- Selected as the Best Airline to Canada by the readers of Executive
Travel magazine in their annual reader survey.
- Selected by the readers of Business Traveler magazine for "Best In-
Flight Services in North America," "Best Airline for Business Class
Service in North America" and "Best North American Airline for
International Travel."
- 47 per cent of domestic customers chose a higher branded fare than the
lowest Tango fare available, a one percentage point increase from the
previous year.
- Revenues from Flight Pass products increased 52 per cent over 2007, and
represented approximately 5.2 per cent of North American revenues.
- Continued to expand the offering of Flight Passes and subscription
payment options for both unlimited travel and fixed credit passes with
the introduction of Spring Getaway and New York Weekender passes, an
Executive Class Pass, as well as Ontario and Quebec Passes for
unlimited flying in the summer of 2008.
- Web penetration for domestic Canada sales in 2008 was 66 per cent - an
increase of three percentage points over the previous year. Web
penetration for combined Canada and U.S. transborder sales was
54 per cent - an increase of four percentage points over the previous
year.
- 74 per cent of domestic Canada sales, or 64 per cent when combined with
U.S. sales, were made directly with Air Canada, either online or
through call centres, compared to 73 per cent of domestic Canada sales,
or 61 per cent when combined with U.S. sales, in 2007.
- 56 per cent of Air Canada's customers used self-service check-in
products world wide - an increase of one percentage point over the
previous year.
- Introduced self-service kiosks for baggage tagging at Paris Charles De
Gaulle Airport and London Heathrow, the first international locations
to join existing facilities at Toronto, Montreal and Vancouver
airports.
- Paid out $33.2 million in 2008 to Air Canada employees under the
company's 'Sharing Our Success' monthly incentive program.
- Air Canada contributed $456 million to funding its employees' defined
benefit pension plans, of which $189 million represented funding of
past service costs in accordance with Air Canada's agreement with the
Office of the Superintendent of Financial Institutions (OSFI).
- Improved fleet and operational efficiencies contributed to savings of
approximately 101 million litres in fuel on passenger traffic reduction
of 0.22 per cent in 2008 compared to the previous year. This
represented an avoidance in CO2 emissions of 260,000 tonnes, the
equivalent to taking 65,434 cars off the road for a year.
- Since launching a carbon offset program in May 2007, Air Canada
customers have funded the planting of more than 2,160 trees to offset
10,800 tonnes of carbon emissions, the equivalent of taking over
2,680 cars off the road for a year.(1) Non-GAAP Measures
Air Canada uses adjusted earnings (loss) per share to assess share
performance without the effects of foreign exchange gains (losses). This
measure is not a recognized measure for financial statement presentation under
Canadian GAAP and does not have a standardized meaning and is therefore not
likely to be comparable to similar measures presented by other public
companies.
EBITDAR is a non-GAAP financial measure commonly used in the airline
industry to assess earnings before interest, taxes, depreciation, amortization
and aircraft rent. EBITDAR is used to view operating results before aircraft
rent, depreciation and amortization as these costs can vary significantly
among airlines due to differences in the way airlines finance their aircraft
and other assets. EBITDAR is not a recognized measure for financial statement
presentation under GAAP and does not have a standardized meaning and is
therefore not comparable to similar measures presented by other public
companies.
Readers should refer to Air Canada's 2008 Management's Discussion and
Analysis (MD&A), which will be filed on SEDAR, and made available on Air
Canada's website at www.aircanada.com, for a reconciliation of EBITDAR to
operating income (loss).
For further information on Air Canada's public disclosure file, including
Air Canada's Annual Information Form dated March 28, 2008, consult SEDAR at
www.sedar.com or www.aircanada.com.
CAUTION REGARDING FORWARD-LOOKING INFORMATION
---------------------------------------------
Air Canada's public communications may include written or oral forward
looking statements within the meaning of applicable securities laws. Such
statements are included in this press release and may be included in other
filings with regulatory authorities and securities regulators. Forward-looking
statements relate to analyses and other information that are based on
forecasts of future results and estimates of amounts not yet determinable.
These statements may involve, but are not limited to, comments relating to
strategies, expectations, planned operations or future actions. These
forward-looking statements are identified by the use of terms and phrases such
as "anticipate", "believe", "could", "estimate", "expect", "intend", "may",
"plan", "predict", "project", "will", "would", and similar terms and phrases,
including references to assumptions.
Forward-looking statements, by their nature, are based on assumptions,
including those described below, and are subject to important risks and
uncertainties. Any forecasts or forward-looking predictions or statements
cannot be relied upon due to, amongst other things, changing external events
and general uncertainties of the business. Actual results may differ
materially from results indicated in forward-looking statements due to a
number of factors, including without limitation, industry, market, credit and
economic conditions, the ability to reduce operating costs and secure
financing, pension issues, energy prices, currency exchange and interest
rates, employee and labour relations, competition, war, terrorist acts,
epidemic diseases, insurance issues and costs, changes in demand due to the
seasonal nature of the business, supply issues, changes in laws, regulatory
developments or proceedings, pending and future litigation and actions by
third parties as well as the factors identified throughout this press release
and the MD&A and, in particular, those identified in the "Risk Factors"
section of Air Canada's 2008 MD&A dated February 13, 2009. The forward-looking
statements contained in this press release and the MD&A represent the
Corporation's expectations as of the date of this press release and the MD&A
and are subject to change after such date. However, the Corporation disclaims
any intention or obligation to update or revise any forward-looking statements
whether as a result of new information, future events or otherwise, except as
required under applicable securities regulations.
Assumptions were made by Air Canada in preparing and making
forward-looking statements. Air Canada assumes that the North American economy
will continue to contract in the first quarter of 2009 and will remain weak
for the remainder of 2009. Air Canada also assumes that Canadian real GDP will
be approximately negative 1 per cent and US real GDP will be approximately
negative 2 per cent. In addition, Air Canada expects that the Canadian dollar
will trade, on average, at Cdn $1.18 per US dollar in the first quarter of
2009 and Cdn $1.16 per US dollar for the full year 2009 and that the price of
fuel will average 68 cents per litre in the first quarter of 2009 and 69 cents
per litre for the full year 2009 (both net of fuel hedging positions).-------------------------------------------------------------------------
Highlights
-------------------------------------------------------------------------
The following table provides the reader with financial and operating
highlights for the Corporation for the periods indicated:
------------------------------------------------------------
Fourth Quarter Full Year
(Canadian
dollars in
millions
except per
share
figures) 2008 2007 Change $ 2008 2007(1) Change $
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Financial
-------------------------------------------------------------------------
Operating
revenues 2,498 2,513 (15) 11,082 10,646 436
-------------------------------------------------------------------------
Operating
income
(loss)
before a
special
provision(2) (146) 72 (218) (39) 433 (472)
-------------------------------------------------------------------------
Operating
income
(loss) (146) 72 (218) (164) 433 (597)
-------------------------------------------------------------------------
Non-operating
expense (44) (52) 8 (170) (122) (48)
-------------------------------------------------------------------------
Income (loss)
before non-
controlling
interest,
foreign
exchange and
income taxes (190) 20 (210) (334) 311 (645)
-------------------------------------------------------------------------
Income (loss)
for the
period (727) 35 (762) (1,025) 429 (1,454)
-------------------------------------------------------------------------
Operating
margin
before a
special pro-
vision %(2) -5.8% 2.9% (8.7)pp -0.4% 4.1% (4.5)pp
-------------------------------------------------------------------------
Operating
margin % -5.8% 2.9% (8.7)pp -1.5% 4.1% (5.6)pp
-------------------------------------------------------------------------
EBITDAR
before a
special pro-
vision(2)(3) 108 274 (166) 934 1,263 (329)
-------------------------------------------------------------------------
EBITDAR(2) 108 274 (166) 809 1,263 (454)
-------------------------------------------------------------------------
EBITDAR
margin
before a
special pro-
vision %(2)(3) 4.3% 10.9% (6.6)pp 8.4% 11.9% (3.5)pp
-------------------------------------------------------------------------
EBITDAR
margin %(3) 4.3% 10.9% (6.6)pp 7.3% 11.9% (4.6)pp
-------------------------------------------------------------------------
Cash, cash
equivalents
and
short-term
investments 1,005 1,239 (234) 1,005 1,239 (234)
-------------------------------------------------------------------------
Free cash
flow (428) (892) 464 (985) (2,233) 1,248
-------------------------------------------------------------------------
Adjusted
debt/equity
ratio 89.6% 67.0% 22.6 pp 89.6% 67.0% 22.6 pp
-------------------------------------------------------------------------
Earnings
(loss) per
share -
basic ($7.27) $0.35 ($7.62) ($10.25) $4.29 ($14.54)
-------------------------------------------------------------------------
Earnings
(loss) per
share -
diluted ($7.27) $0.35 ($7.62) ($10.25) $4.27 ($14.52)
-------------------------------------------------------------------------
Operating
Statistics Change % Change %
-------------------------------------------------------------------------
Revenue
passenger
miles
(millions)
(RPM) 10,845 11,446 (5.3) 50,519 50,629 (0.2)
-------------------------------------------------------------------------
Available
seat miles
(millions)
(ASM) 13,571 14,715 (7.8) 62,074 62,814 (1.2)
-------------------------------------------------------------------------
Passenger
load
factor 79.9% 77.8% 2.1 pp 81.4% 80.6% 0.8 pp
-------------------------------------------------------------------------
Passenger
revenue
per RPM
(cents)(4) 20.1 18.9 6.2 19.2 18.4 4.3
-------------------------------------------------------------------------
Passenger
revenue
per ASM
(cents)(4) 16.0 14.7 9.1 15.6 14.8 5.3
-------------------------------------------------------------------------
Operating
revenue
per ASM
(cents)(4) 18.4 16.9 8.9 17.9 16.9 5.3
-------------------------------------------------------------------------
Operating
expense
per ASM
("CASM")
(cents) 19.5 16.6 17.4 17.9 16.3 10.2
-------------------------------------------------------------------------
CASM,
excluding
fuel expense
(cents) 13.6 12.4 9.9 12.4 12.2 1.7
-------------------------------------------------------------------------
Average
number of
full-time
equivalent
(FTE)
employees
(thou-
sands)(5) 23.6 23.9 (1.3) 24.2 23.9 1.1
-------------------------------------------------------------------------
Aircraft in
operating
fleet at
period
end(6) 333 340 (2.1) 333 340 (2.1)
-------------------------------------------------------------------------
Average fleet
utilization
(hours per
day)(7) 8.8 9.3 (5.4) 9.6 9.8 (2.0)
-------------------------------------------------------------------------
Average
aircraft
flight
length
(miles)(7) 827 851 (2.8) 863 874 (1.3)
-------------------------------------------------------------------------
Fuel price
per litre
(cents)(8) 95.8 67.5 41.9 90.4 65.6 37.8
-------------------------------------------------------------------------
Fuel litres
(millions) 822 905 (9.2) 3,763 3,873 (2.8)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(1) Reflects the financial and operating highlights for Air Canada for
2008 and the financial and operating highlights for the Air Canada
Services segment, which excluded the consolidation of Jazz, for 2007.
(2) A provision for cargo investigations of $125 million was recorded in
the first quarter of 2008.
(3) See section 20 "Non-GAAP Financial Measures" in Air Canada's 2008
MD&A for a reconciliation of EBITDAR before the provision for cargo
investigations to operating income (loss) and EBITDAR to operating
income (loss).
(4) A favourable revenue adjustment of $26 million relating to a change
in accounting estimates was recorded in the fourth quarter of 2007.
For comparative purposes, yield and RASM percentage changes were
adjusted to include the impact of removing $26 million from the
fourth quarter of 2007.
(5) Reflects FTE employees at Air Canada. Excludes FTE employees at Jazz.
(6) Excludes chartered freighters in 2008 and 2007. Includes Jazz
aircraft covered under the Jazz CPA.
(7) Excludes third party carriers operating under capacity purchase
arrangements. Includes Jazz aircraft covered under the Jazz CPA.
(8) Includes fuel handling and is net of fuel hedging results.%SEDAR: 00001324EF
For further information:
For further information: Isabelle Arthur (Montréal), (514) 422-5788; Peter Fitzpatrick (Toronto), (416) 263-5576; Angela Mah (Vancouver), (604) 270-5741; aircanada.com