Air Canada · TSX:AC
Air Canada — Q1 2007 Earnings Presentation
22 slides from Air Canada's earnings presentation, May 11, 2007
Slide 1: First Quarter 2007
First Quarter 2007 May 11, 2007
Slide 2: Table of Contents
Table of Contents • Operating Statistics • Revenue Highlights • Expense Highlights
Slide 3: Air Canada Services Operating Results Improve by $46 mln
Air Canada Services Operating Results Improve by $46 mln Change (millions) Q1 2007 Q1 2006 Fav./(Unfav.) Oper. Revenue $ 2,534 $ 2,394 $ 140 Oper. Expense 2,612 2,518 (94) Oper. Loss (78) (124) 46 Non-oper. Income (Expense) 8 (40) 48 Loss Before NCI, FX & Tax (70) (164) 94 Non-controlling Interest (
Slide 4: Q1 Net Interest Expense Down $15 mln
Q1 Net Interest Expense Down $15 mln Change (millions) Q1 2007 Fav./(Unfav.) Net Interest Expense $ (29) $ 15 Gain on Sale 7 5 $34 mln gain Other Non-Operating Inc. 30 28 on derivatives Total Non-Operating Income $ 8 $ 48
Slide 5: Q1 2007 Actual vs Prior Year
Q1 2007 Actual vs Prior Year ASMs RPMs PLF Yield RASM Rev Canada Ï 2.2% Ï 7.2% Ï 3.8 PP Ï 1.4% Ï 6.4% Ï 8.7% US Transborder Ï 8.1% Ï 5.5% Ð 1.8 PP Ð 1.3% Ð 3.6% Ï 4.2% Atlantic Ï 2.1% Ï 4.6% Ï 2.0 PP Ï 2.0% Ï 4.5% Ï 6.7% Pacific Ï 0.9% Ï 3.2% Ï 1.9 PP Ï 4.8% Ï 7.2% Ï 8.1% Latin Amer. & Other Ï 1.8%
Slide 6: North American Growth Accounts for ¾ of Overall Capacity Increase
North American Growth Accounts for ¾ of Overall Capacity Increase (Y-O-Y Changes in Capacity) % Change in ASMs 25% 20% 15% 10% 5% 0% -5% Canada U.S. Oth. Int'l Total Q1 2006/2005 Q2 2006/2005 Q3 2006/2005 Q4 2006/2005 Q1 2007/2006
Slide 7: Strong Traffic Outpaces Capacity Growth in All Sectors but U.S.
Strong Traffic Outpaces Capacity Growth in All Sectors but U.S. (Y-O-Y Changes in Traffic) % Change in RPMs 20% 15% 10% 5% 0% -5% Canada U.S. Oth. Int'l Total Q1 2006/2005 Q2 2006/2005 Q3 2006/2005 Q4 2006/2005 Q1 2007/2006
Slide 8: Yield Performance Improves in all Sectors from 4th Quarter's Pace
Yield Performance Improves in all Sectors from 4th Quarter's Pace (Y-O-Y Changes in Passenger Yield) % Change in Yield 15% 10% 5% 0% -5% Canada U.S. Oth. Int'l Total Q1 2006/2005 Q2 2006/2005 Q3 2006/2005 Q4 2006/2005 Q1 2007/2006
Slide 9: System RASM Growth Strengthens on Better Yield and Higher LF
System RASM Growth Strengthens on Better Yield and Higher LF (Y-O-Y Changes in Revenue per ASM) % Change in RASM 20% 15% 10% 5% 0% -5% -10% Canada U.S. Oth. Int'l Total Q1 2006/2005 Q2 2006/2005 Q3 2006/2005 Q4 2006/2005 Q1 2007/2006
Slide 10: System Revenue Growth Stable as Stronger Domestic and Intn'l Revenues Offset Lower Transborder Growth
System Revenue Growth Stable as Stronger Domestic and Intn'l Revenues Offset Lower Transborder Growth (Y-O-Y Changes in Passenger Revenue) % Change in Revenue 30% 25% 20% 15% 10% 5% 0% Canada U.S. Oth. Int'l Total Q1 2006/2005 Q2 2006/2005 Q3 2006/2005 Q4 2006/2005 Q1 2007/2006
Slide 11: Canada – Q1 RASM Jumps 6.4% Mostly on Load Factor
Canada – Q1 RASM Jumps 6.4% Mostly on Load Factor Y-O-Y Change Capacity (ASM) Load Factor % Change PP Change 10 4 2 5 0 -2 0 -4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2006 2007 2006 2007 % Change Yield RASM % Change 15 15 10 10 5 5 0 0 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2006 2007 2006 2007
Slide 12: US Transborder – RASM Declines 3.6% as Weaker Load Factor Combines With a Soft Yield
US Transborder – RASM Declines 3.6% as Weaker Load Factor Combines With a Soft Yield Y-O-Y Change Capacity (ASM) Load Factor % Change PP Change 25 10 20 5 15 10 0 5 0 -5 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2006 2007 2006 2007 % Change Yield % Change RASM 15 20 10 15 10 5 5 0 0 -5 -5 -10 -10 Q1 Q2 Q3 Q4 Q1
Slide 13: Atlantic – Strong Yield and a Jump in LF Combine to Lift RASM 4.5%
Atlantic – Strong Yield and a Jump in LF Combine to Lift RASM 4.5% Y-O-Y Change Capacity (ASM) Load Factor % Change PP Change 15 4 10 2 5 0 0 -5 -10 -2 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2006 2007 2006 2007 Yield RASM % Change % Change 4 6 4 2 2 0 0 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2006 2007 2006 2007
Slide 14: Pacific – 7.2% RASM Growth on 4.8% Jump in Yield and Solid LF
Pacific – 7.2% RASM Growth on 4.8% Jump in Yield and Solid LF Y-O-Y Change Capacity (ASM) Load Factor % Change PP Change 4 4 2 3 0 2 -2 1 -4 0 -6 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2006 2007 2006 2007 % Change Yield % Change RASM 6 10 4 5 2 0 0 -2 -4 -5 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2006 2007 2006 2007
Slide 15: Caribbean, Latin America & Australia – RASM Growth Continues Equally on Yield and Load Factor
Caribbean, Latin America & Australia – RASM Growth Continues Equally on Yield and Load Factor Y-O-Y Change Capacity (ASM) Load Factor % Change PP Change 6 6 4 4 2 2 0 0 -2 -4 -2 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2006 2007 2006 2007 Yield RASM % Change % Change 12 15 8 10 4 5 0 0 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3
Slide 16: Total – System RASM Lifts 3.5% on Higher Yield and LF
Total – System RASM Lifts 3.5% on Higher Yield and LF Y-O-Y Change Capacity (ASM) Load Factor % Change PP Change 6 4 4 2 2 0 0 -2 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2006 2007 2006 2007 % Change Yield RASM % Change CASM RASM 10 6 8 4 6 2 4 2 0 0 -2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2006 2007 2006 2007
Slide 17: Average Salary Up 5.3%; Employee Levels Down 501 or 2.1%
Average Salary Up 5.3%; Employee Levels Down 501 or 2.1%. (Y-O-Y Change – Average Salaries & Employees) % Change Y-O-Y 6% 4% 2% 0% -2% -4% Q2'06 Q3'06 Q4'06 Q1'07 Average Salaries Employees
Slide 18: Cost/Litre Down 1.1% While Fuel Productivity Declines 0.7%
Cost/Litre Down 1.1% While Fuel Productivity Declines 0.7% (Fuel Productivity & Unit Cost) % Change Y-O-Y 30% 20% 10% 0% -10% Q1'06 Q2'06 Q3'06 Q4'06 Q1'07 Fuel Productivity (ASMs/Lt) Fuel Cost (Cdn cts/Lt)
Slide 19: "Other" Category up 5.3% on Air Canada Vacation Ground Package Costs
"Other" Category up 5.3% on Air Canada Vacation Ground Package Costs % Change Y-O-Y 15% 10% 5% 0% -5% -10% -15% h. . r es IT i ss urc Ba t uel en &B Fe . m& mm c p. P / Ms pre R Ms e. F er od er SW Mtc A/C O th A/C Co Co RP Us AS De Ca Fo Q1 2007/2006
Slide 20: Unit Cost Up 1.7% Due Higher Average Salaries, Mtce. Expenses, ACV Ground Packages and Weather
Unit Cost* Up 1.7% Due Higher Average Salaries, Mtce. Expenses, ACV Ground Packages and Weather (Cost Per ASM) % Change Y-O-Y 10% 5% 0% -5% Q2'06 Q3'06 Q4'06 Q1'07 * 2006 excluding special charges
Slide 21: Caution Concerning Forward-looking Information
Caution Concerning Forward-looking Information: Certain statements made in this Q1 2007 presentation are forward-looking statements, which are, by their nature, based on assumptions and are subject to important risks and uncertainties. Any forecasts or forward-looking predictions or statements canno
Slide 22: Air Canada
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