Air Canada · TSX:AC
Air Canada — Q1 2011 Earnings Presentation
22 slides from Air Canada's earnings presentation, May 5, 2011
Slide 1: First Quarter Financial Results
2011 First Quarter Financial Results May 5, 2011
Slide 2: Table of Contents
Table of Contents • Financial Highlights • Passenger Revenue • Operating Expense 2
Slide 3: Financial Highlights – Results of Operations
Financial Highlights – Results of Operations Q1 11 / Q1 10 (millions) Q1 2011 Q1 2010 Change Operating revenue $ 2,753 $ 2,519 $ 234 Operating loss $ (66) $ (136) $ 70 EBITDAR $ 207 $ 150 $ 57 Loss for the period $ (19) $ (112) $ 93 Operating margin (2.4)% (5.4)% 3.0 PP EBITDAR margin 7.5% 6.0% 1.5
Slide 4: Financial Highlights – Financial Position and Cash Flow
Financial Highlights – Financial Position and Cash Flow Q1 11 / Q1 10 (millions) Q1 2011 Q1 2010 Change Cash flow from operations $ 252 $ 292 $ (40) Additions to property, equipment & $ (62) $ (77) $ 15 intangible assets Free cash flow $ 190 $ 215 $ (25) Cash, cash equivalents & short-term $ 2,114 $
Slide 5: Non-Operating Expense
Non-Operating Expense Q1 11 / Q1 10 (millions) Q1 2011 Q1 2010 Change Foreign exchange gain $ 104 $ 123 $ (19) Interest income $ 9 $ 2 $ 7 Interest expense $ (84) $ (83) $ (1) Net financing expense relating to $ (4) $ (19) $ 15 employee benefit liabilities Gain on financial instruments $ 27 $ 2 $ 25
Slide 6: Q1 2011 Versus Q1 2010
Q1 2011 Versus Q1 2010 Passenger Capacity Traffic Passenger Passenger Revenue (ASMs) (RPMs) LF Yield RASM (%) (%) (%) (PP) (%) (%) Canada Ï 8.4 Ð 0.9 Ð 0.5 Ï 0.4 Ï 8.7 Ï 9.2 US Transborder Ï 14.5 Ï 10.8 Ï 11.5 Ï 0.4 Ï 2.5 Ï 3.1 Atlantic Ï 0.8 Ï 6.2 Ð 0.8 Ð 5.0 Ï 1.3 Ð 5.4 Pacific Ï 17.0 Ï 21.5 Ï 16.
Slide 7: System Capacity Increased 7.7%
System Capacity Increased 7.7% – Pacific Capacity Up 21.5% – US Transborder & Int'l Combined Capacity Up 11.3% (Y-O-Y Changes in Capacity) % Change in ASMs 15% 10% 5% 0% -5% Canada U.S. Int'l Total Q1 2010/2009 Q2 2010/2009 Q3 2010/2009 Q4 2010/2009 Q1 2011/2010 7
Slide 8: System Traffic Increased 5.7%
System Traffic Increased 5.7% - US Transborder and Pacific, Up 11.5% and 16.0% Respectively (Y-O-Y Changes in Traffic) % Change in RPMs 15% 10% 5% 0% -5% Canada U.S. Int'l Total Q1 2010/2009 Q2 2010/2009 Q3 2010/2009 Q4 2010/2009 Q1 2011/2010 8
Slide 9: Yield Improved 4.2% on Higher Fuel Surcharges and Fares
Yield Improved 4.2% Mainly on Higher Fuel Surcharges & Higher Fares (Y-O-Y Changes in Passenger Yield) % Change in Yield 10% 5% 0% -5% -10% Canada U.S. Int'l Total Q1 2010/2009 Q2 2010/2009 Q3 2010/2009 Q4 2010/2009 Q1 2011/2010 9
Slide 10: System Passenger RASM Increased 2.2%
System Passenger RASM Increased 2.2% due to 4.2% Yield Growth; Partly Offset By LF Decrease of 1.5 PP (Y-O-Y Changes in Revenue per ASM) % Change in RASM 15% 10% 5% 0% -5% Canada U.S. Int'l Total Q1 2010/2009 Q2 2010/2009 Q3 2010/2009 Q4 2010/2009 Q1 2011/2010 10
Slide 11: System Revenues Increased 10.3%
System Revenues Increased 10.3% due to 5.7% Traffic Growth and 4.2% Yield Improvement (Y-O-Y Changes in Passenger Revenue) % Change in Revenue 30% 20% 10% 0% -10% Canada U.S. Int'l Total Q1 2010/2009 Q2 2010/2009 Q3 2010/2009 Q4 2010/2009 Q1 2011/2010 11
Slide 12: Canada
Canada Passenger RASM Increased 9.2% Mainly Due to Yield Growth of 8.7% Y-O-Y Change Capacity (ASM) Load Factor % Change PP Change 3 3 2 2 1 1 0 0 -1 -1 -2 -2 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2010 2011 2010 2011 % Change Yield % Change P-RASM 10 10 5 5 0 0 -5 -5 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2010 2011
Slide 13: US Transborder
US Transborder Passenger RASM Increased 3.1% Mainly Due to a 2.5% Growth in Yield Y-O-Y Change Capacity (ASM) Load Factor % Change PP Change 15 3 10 2 5 1 0 0 -5 -1 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2010 2011 2010 2011 % Change Yield % Change P-RASM 4 4 2 2 0 0 -2 -2 -4 -4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1
Slide 14: Atlantic
Atlantic Pass. RASM Decr. 5.4% Due to 5.0 PP Decr. In LF - Partly Offset by 1.3% Yield Incr. Y-O-Y Change Capacity (ASM) Load Factor % Change PP Change 15 2 10 0 5 -2 0 -4 -5 -6 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2010 2011 2010 2011 Yield P-RASM % Change % Change 10 15 10 5 5 0 0 -5 -5 -10 Q1 Q2 Q3 Q4 Q1
Slide 15: Pacific
Pacific Passenger RASM Decreased 3.9% Mainly Due to 4.0 PP Decrease In LF Y-O-Y Change Capacity (ASM) Load Factor % Change PP Change 30 10 20 5 10 0 0 -5 -10 -10 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2010 2011 2010 2011 Yield P-RASM % Change % Change 20 30 20 10 10 0 0 -10 -10 -20 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4
Slide 16: Australia, Caribbean, Mexico & South America (Other)
Australia, Caribbean, Mexico & South America ("Other") Passenger RASM Incr. 6.7% Due to 8.1% Higher Yield; Partially Offset by 1.1 PP LF Decrease Y-O-Y Change Capacity (ASM) Load Factor % Change PP Change 15 3 10 2 1 5 0 0 -1 -5 -2 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2010 2011 2010 2011 Yield P-RASM % Cha
Slide 17: Total / System
Total / System Passenger RASM Increased 2.2% Mainly Due to 4.2% Higher Yield; Partially Offset by LF Decrease of 1.5 PP Y-O-Y Change Capacity (ASM) Load Factor PP Change % Change 10 3 2 5 1 0 0 -1 -5 -2 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2010 2011 2010 2011 % Change Yield P-RASM CASM RASM % Change 6 10 4
Slide 18: WS&B Expenses Up 7.0%
WS&B Expenses Up 7.0% Mainly Due to Higher Pension and Post- Employment Benefits Expense – Employee Productivity Up 4.4% YOY (Y-O-Y Change – Average Salaries & Employees) % Change Y-O-Y 4% 2% 0% -2% -4% Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Average Salaries Employees 18
Slide 19: Operating Expense Up $164M
Oper. Exp. Up $164M Largely on 7.7% ASM Growth, Higher Fuel Prices, Higher Emp. Ben. Exp. and Sales & Dist. Costs; Partly offset by Fav. FX & Lower Acft. Mtce. Exp. and Ownership Costs % Change Y-O-Y 20% 10% 0% -10% -20% v p st . e. . IT Na s hi ur Mtc uel /Di B & ort/ p. P ner Ms Ms & F er l es m.
Slide 20: Unit Cost Down 1.4%; Down 5.3% Excl. Fuel
Unit Cost Down 1.4%; Down 5.3% Excl. Fuel – Capacity Growth, Fav FX, Reduction in Aircraft Maintenance and Ownership Costs % Change Y-O-Y 2% 0% -2% -4% -6% Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Cost per ASM Cost per ASM excluding fuel 20
Slide 21: Further Information
Further Information For further information on Air Canada's public disclosure file, including Air Canada's First Quarter 2011 MD&A dated May 5, 2011 and Air Canada's Annual Information Form, dated March 30, 2011 consult Air Canada's website at aircanada.com or SEDAR at www.sedar.com 21
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