Air Canada · TSX:AC
Air Canada — Non-Deal Roadshow (December 2012)
30 slides from Air Canada's roadshow presentation, December 2012
Slide 1: Air Canada December 2012
AIR CANADA December 2012 Best International Airline in North America Meilleur transporteur "ey, ieee A STAR ALLIANCE MEMBER ly Ceete CORN MEMBRE DU RESEAU STAR ALLIANCE “AW
Slide 2: Caution Regarding Forward-looking Information
Caution Regarding Forward-looking Information Air Canada’s public communications may include forward-looking statements within the meaning of applicable securities laws. Such statements may be included in this presentation and may be included in other communications, including filings with regulator
Slide 3: Agenda
Agenda About Air Canada Building a Stronger Airline Financial Performance Making Progress on Transformation 33
Slide 4: About Air Canada
About Air Canada 4
Slide 5: Leading Share in All Markets
Leading Share in All Markets Domestic Transborder International accounts for accounts for accounts for 39% of 20% of 41% of passenger passenger passenger revenue revenue revenue LCC WJA 4% DAL Other Airlines 17% 7% WJA 10% 35% Other AMR 11% UAL Airlines Air Canada 17% 38% 37% Other Airlines Air Cana
Slide 6: Fleet Flexibility to Adjust to Market Demand
Fleet Flexibility to Adjust to Market Demand Boeing aircraft (48) Airbus aircraft (97) EMBRAER aircraft (60) 191 seats – 349 seats 120 seats – 265 seats 73 seats – 93 seats New collective agreement with pilots provides ability to operate low- cost airline with up to 50 aircraft – aimed at growing Ai
Slide 7: Air Canada Express – Important Part of N.A. Strategy
Air Canada Express – Important Part of N.A. Strategy acts as a feeder to Air Canada's scheduled routes CRJ aircraft (52) Dash 8 aircraft (78) Beech aircraft (17) 50 seats – 75 seats 37 seats – 74 seats 18 seats Jazz fleet currently at 125 aircraft – 122 aircraft by February 2013 – nine 50-seat CRJ 1
Slide 8: Industry Leading Products & Services Provide Competitive Edge
Industry Leading Products & Services Provide Competitive Edge Loyalty program Maple Leaf Lounges Concierge program Lie-flat beds in Executive First Personal seat back entertainment at every seat Mobile-friendly booking and check-in 8
Slide 9: Other Leading Services Contribute to Profitability
Other Leading Services Contribute to Profitability Canada's largest provider Premium provider of jet One of Canada's leading of air cargo services charter services tour operators 9
Slide 10: Pension Update
Pension Update Estimated pension solvency deficit of $4.2B at January 1, 2012, $2.0B higher than solvency deficit at January 1, 2011 In light of Air Canada 2009 pension regulations, valuations do not increase required past service cost funding obligations until 2014 – fixed payments of $150, $175 an
Slide 11: Building a Stronger Airline
Building a Stronger Airline 11
Slide 12: Air Canada's Business Strategy
Air Canada's Business Strategy Leveraging international network while maintaining a disciplined approach to growth Improving cost structure and generating incremental revenues Engaging with customers while promoting premium class cabin and products Fostering positive culture change 12 12
Slide 13: Building on a Powerful Global Network
Building on a Powerful Global Network Air Canada Routes – Winter 2012-13 178 Direct Destinations: 59 in Canada 56 in the U.S. 63 internationally 15th Largest Airline in the World 352 aircraft >1,500 daily flights ~34M passengers carried 13
Slide 14: Star Alliance & Joint Venture Enhance Market Presence
Star Alliance™ & Joint Venture Enhance Market Presence Star Alliance – 6th time winner Best Airline Alliance in the 2012 Skytrax World Airline Awards™ 27 Members >4,300 Aircraft 193 Countries Served >21.5K Daily Departures 1,356 Airports >990 Lounges >678M Passengers/year 1414
Slide 15: Leveraging World Class Hubs
Leveraging World Class Hubs Increasing global connecting traffic via Canada (sixth freedom) Toronto Pearson is centre of catchment area with less traffic congestion Number of Air Canada international passengers connecting through Toronto Pearson over 160% since 2009 Continued strength of sixth freed
Slide 16: Continuous Cost Transformation and Improvement
Continuous Cost Transformation and Improvement Surpassed CTP target of annual revenue and cost saving benefits of $530M by the end of the third quarter of 2011 A number of projects are currently in progress to deliver cost savings during 2012 – these include: – improving aircraft turnaround times –
Slide 17: Launch of Low-cost Airline in 2013 Aimed at Improving Margins
Launch of Low-cost Airline in 2013 Aimed at Improving Margins Plan is to form an integrated leisure group by combining the activities of Air Canada Vacations with a low-cost leisure airline Service will commence in July 2013 with two Boeing 767- 300ER and two Airbus A319 aircraft to be released from
Slide 18: Leveraging Opportunities for Revenue Growth
Leveraging Opportunities for Revenue Growth Paid upgrades Baggage fees Seat selection fees Improved net Aeroplan revenue – Reduced Aeroplan frequent flyer accumulation fees to 50% on Tango service for international routes Launch of loyalty program for small businesses – Loyalty program caters to sma
Slide 19: Delivering "Best in Class" Service
Delivering "Best in Class" Service Winner for the 3rd consecutive year of Numerous awards "Best International Airline received confirm that Air in North America" Canada is delivering on in the 2012 Skytrax World Airline Awards its priority of engaging its customers Winner for the 5th consecutive yea
Slide 20: Driving Premium RASM Growth
Driving Premium RASM Growth P-RASM Premium P-RASM 30 20 Y-O-Y % Change 10 2.2% 0.2% 0 -10 -20 -30 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2009/2008 2010/2009 2011/2010 2012/2011 20
Slide 21: Enhancing Culture to Increase Competitiveness
Enhancing Culture to Increase Competitiveness Promoting leadership, ownership and entrepreneurship Emphasis on cost containment is forging a more entrepreneurial culture New training courses for managers: continuous improvement and change management Empowering employees to make decisions Industry ho
Slide 22: Financial Performance
Financial Performance 22
Slide 23: First Nine Months 2012 and Annual Guidance
First Nine Months 2012 and Annual Guidance First Nine Months Annual Guidance* 2012 Adjusted EBITDAR(1) of $1,043M Guidance -2012 Adjusted EBITDAR(1) Margin of 11.2% ASM growth of 0.75% to 1.25% Domestic ASM growth of Passenger load factor of 83.2% 0.5% to 1.0% Unit passenger revenue (P-RASM) up Adju
Slide 24: Improving Operating Margin & Cost Structure
Improving Operating Margin & Cost Structure RASM* Continue to focus on 18 CASM 12 15.8 16.5 17.2 17.7 reductions 6 CASM** 0 (adjusted) Q3 2009 Q3 2010 Q3 2011 Q3 2012 12 10.4 10.6 10.6 10.7 6 Maintaining industry- 0 leading RASM Q3 2009 Q3 2010 Q3 2011 Q3 2012 * Operating RASM ** Excludes fuel expen
Slide 25: Maintaining Strong Liquidity Position
Maintaining Strong Liquidity Position C$ billions $2.4 2.4 $2.2 $2.1 $2.2 $2.2 2.2 2.0 1.8 1.6 $1.4 1.4 $1.2 1.2 $1.0 1.0 0.8 0.6 0.4 0.2 0.0 2007 2008 2009 2010 2011 Q1 Q2 Q3 2012 2012 2012 % of trailing 12-month 12% 9% 14% 20% 18% 19% 20% 18% operating revenues Note: Liquidity is comprised of unre
Slide 26: Improving Strength of Balance Sheet
Improving Strength of Balance Sheet Adjusted net debt down $1.5 billion $6,000 from 2009 $5,768 $5,500 Millions $5,000 $4,874 $4,500 $4,576 $4,268 $4,000 Dec 31 Dec 31 Dec 31 Sept 30 2009 2010 2011 2012 26
Slide 27: Making Progress on Transformation
Making Progress on Transformation 27
Slide 28: Committed to Improving Profitability
Committed to Improving Profitability Leverage and expand international network by capitalizing on competitive advantages – widely-recognized brand – extensive global network – loyalty program (Aeroplan) – competitive products and services – geographically well-positioned hubs – introduction of new B
Slide 29: Committed to Improving Profitability
Committed to Improving Profitability Increase sixth freedom traffic from the U.S. to connect through the airline’s hub airports in Canada to onward international flights Promote premium class cabin and broaden the airline’s access to corporate customers by focusing on small and medium size enterpris
Slide 30: Go Far…
AIR CANADA (@&)