Air Canada · TSX:AC
Air Canada — Q4 2009 Earnings Presentation
27 slides from Air Canada's earnings presentation, Feb 10, 2010
Slide 1: Fourth Quarter and Year-End Financial Results
2009 Fourth Quarter and Year-End Financial Results February 10, 2010
Slide 2: Table of Contents
Table of Contents • Financial Highlights • Passenger Revenue • Operating Expense
Slide 3: Financial Highlights – Results of Operations Q4 09 / Q4 08
Financial Highlights – Results of Operations Q4 09 / Q4 08 (millions) Q4 2009 Q4 2008 Change Operating Revenue $ 2,348 $ 2,498 $ (150) Operating Loss $ (83) $ (146) $ 63 EBITDAR $ 167 $ 108 $ 59 Net Loss $ (56) $ (727) $ 671 Operating Margin (3.5)% (5.8)% 2.3 PP EBITDAR Margin 7.1% 4.3% 2.8 PP RASM
Slide 4: Financial Highlights – Results of Operations 2009 / 2008
Financial Highlights – Results of Operations 2009 / 2008 (millions) 2009 2008 Change Operating Revenue $ 9,739 $11,082 $ (1,343) Operating Loss (1) $ (316) $ (39) $ (277) EBITDAR (1) $ 679 $ 934 $ (255) Net Loss $ (24) $(1,025) $ 1,001 Operating Margin (1) (3.2)% (0.4)% (2.8) PP EBITDAR Margin (1) 7
Slide 5: Financial Highlights – Financial Position and Cash Flow Q4
Financial Highlights – Financial Position and Cash Flow Q4 09 / Q4 08 (millions) Q4 2009 Q4 2008 Change Cash Flow used for Operations $ (10) $ (278) $ 268 Additions to Capital Assets $ (42) $ (150) $ 108 Free Cash Flow $ (52) $ (428) $ 376 Cash, Cash Equivalents & Short-term $ 1,407 $ 1,005 $ 402 In
Slide 6: Financial Highlights – Financial Position and Cash Flow 2009
Financial Highlights – Financial Position and Cash Flow 2009 / 2008 (millions) 2009 2008 Change Cash Flow used for Operations $ (167) $ (102) $ (65) Additions to Capital Assets $ (232) $ (883) $ 651 Free Cash Flow $ (399) $ (985) $ 586 Cash, Cash Equivalents & Short-term $ 1,407 $ 1,005 $ 402 Invest
Slide 7: Non-Operating Expense Q4 09 / Q4 08
Non-Operating Expense Q4 09 / Q4 08 (millions) Q4 2009 Q4 2008 Change Net Interest Expense $ (85) $ (71) $ (14) Loss on Assets (1) $ (25) $ (5) $ (20) Gain on Financial Instruments $ 22 $ 32 $ (10) Other $ 5 $ - $ 5 Total Non-Oper. Expense $ (83) $ (44) $ (39) (1) Includes a loss of $24M in Q4/09 wh
Slide 8: Non-Operating Expense 2009 / 2008
Non-Operating Expense 2009 / 2008 (millions) 2009 2008 Change Net Interest Expense $ (355) $(225) $ (130) Loss on Assets (1) $ (95) $ (34) $ (61) Gain on Financial Instruments $ 95 $ 92 $ 3 Other $ - $ (3) $ 3 Total Non-Oper. Expense $ (355) $(170) $ (185) (1) 2009 includes an impairment charge of $
Slide 9: Q4 2009 versus Q4 2008
Q4 2009 versus Q4 2008 Rev ASMs RPMs PLF Yield RASM Canada 7.9% 0.6% 1.3% 0.5 PP 6.7% 7.3% US Transborder 3.7% 1.8% 5.0% 2.5 PP 1.4% 1.9% Atlantic 4.8% 6.7% 2.4% 3.3 PP 7.0% 10.8% Pacific 9.7% 6.5% 4.2% 1.8 PP 13.4% 15.2% Other 10.8% 0.1% 3.3%
Slide 10: 2009 versus 2008
2009 versus 2008 Rev ASMs RPMs PLF Yield RASM Canada 12.6% 3.7% 4.1% 0.3 PP 8.7% 9.1% US Transborder 12.5% 7.7% 9.6% 1.6 PP 3.2% 5.1% Atlantic 8.6% 1.4% 0.6% 1.7 PP 8.0% 9.9% Pacific 16.7% 12.5% 11.7% 0.8 PP 5.7% 4.8% Other 15.8% 1.7% 2.3% 0.5
Slide 11: System Capacity Increased 2.0% in Q4 09
System Capacity Increased 2.0% in Q4 09 (Y-O-Y Changes in Capacity) % Change in ASMs 10% 5% 0% -5% -10% -15% -20% Canada U.S. Int'l Total Q4 2008/2007 Q1 2009/2008 Q2 2009/2008 Q3 2009/2008 Q4 2009/2008
Slide 12: Q4 09 System Traffic Increased 0.4%
Q4 09 System Traffic Increased 0.4% (Y-O-Y Changes in Traffic) % Change in RPMs 5% 0% -5% -10% -15% -20% Canada U.S. Int'l Total Q4 2008/2007 Q1 2009/2008 Q2 2009/2008 Q3 2009/2008 Q4 2009/2008
Slide 13: Q4 09 YOY Yield Down 7.3% – Improvement From Previous Quarters
Q4 09 YOY Yield Down 7.3% – Improvement From Previous Quarters (Y-O-Y Changes in Passenger Yield) % Change in Yield 15% 10% 5% 0% -5% -10% -15% Canada U.S. Int'l Total Q4 2008/2007 Q1 2009/2008 Q2 2009/2008 Q3 2009/2008 Q4 2009/2008
Slide 14: System RASM Declined 8.8% in Q4 09
System RASM Declined 8.8% in Q4 09 Due to Lower Yield of 7.3% and Load Factor Decrease of 1.3 pp (Y-O-Y Changes in Revenue per ASM) % Change in RASM 20% 15% 10% 5% 0% -5% -10% -15% Canada U.S. Int'l Total Q4 2008/2007 Q1 2009/2008 Q2 2009/2008 Q3 2009/2008 Q4 2009/2008
Slide 15: Lower Avg. Fares and Reduced Fuel Surcharges Resulted in Lower Revenues
Lower Avg. Fares and Reduced Fuel Surcharges YOY in Q4 09 Resulted in Lower Revenues (Y-O-Y Changes in Passenger Revenue) % Change in Revenue 10% 5% 0% -5% -10% -15% -20% Canada U.S. Int'l Total Q4 2008/2007 Q1 2009/2008 Q2 2009/2008 Q3 2009/2008 Q4 2009/2008
Slide 16: Canada – Q4 RASM Decreased 7.3% Mainly Due to Lower Yield
Canada – Q4 09 RASM Decreased 7.3% Mainly Due to Lower Yield Y-O-Y Change Capacity (ASM) Load Factor % Change PP Change 5 2 1 0 0 -1 -5 -2 -10 -3 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 2008 2009 2008 2009 % Change Yield % Change RASM 5 5 0 0 -5 -5 -10 -10 -15 -15 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 2008 2009 2008
Slide 17: US Transborder – Q4 RASM Decreased 1.9%
US Transborder – Q4 09 RASM Decreased 1.9% Due to Lower LF as Yield Up 1.4% Y-O-Y Change Capacity (ASM) Load Factor % Change PP Change 5 4 0 2 -5 0 -10 -2 -15 -4 -20 -6 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 2008 2009 2008 2009 % Change Yield % Change RASM 10 10 5 5 0 0 -5 -5 -10 -10 -15 Q4 Q1 Q2 Q3 Q4 Q4 Q1
Slide 18: Atlantic – Q4 RASM Declined 10.8%
Atlantic – Q4 09 RASM Declined 10.8% on Lower Yield and Load Factor Y-O-Y Change Capacity (ASM) Load Factor % Change PP Change 10 4 5 2 0 0 -5 -10 -2 -15 -4 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 2008 2009 2008 2009 Yield RASM % Change % Change 10 15 5 10 5 0 0 -5 -5 -10 -10 -15 -15 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q
Slide 19: Pacific – Q4 RASM Down 15.2%
Pacific – Q4 09 RASM Down 15.2% Due Mostly to Lower Yield But Also LF Y-O-Y Change Capacity (ASM) Load Factor % Change PP Change 10 10 0 5 -10 0 -20 -30 -5 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 2008 2009 2008 2009 Yield RASM % Change % Change 20 30 10 20 10 0 0 -10 -10 -20 -20 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4
Slide 20: Caribbean, Latin America & Australia (Others) – Q4 RASM Down 10.7%
Caribbean, Latin America & Australia ("Others") – Q4 09 RASM Down 10.7% on Lower Yield as Load Factor Up 2.6 pp Y-O-Y Change Capacity (ASM) Load Factor % Change PP Change 10 4 2 0 0 -10 -2 -20 -4 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 2008 2009 2008 2009 Yield RASM % Change % Change 20 10 10 0 0 -10 -10 -20
Slide 21: Total – Q4 RASM Down 8.8%
Total – Q4 09 RASM Down 8.8% Mainly on Lower Yield But Also LF Y-O-Y Change Capacity (ASM) Load Factor PP Change % Change 5 3 2 0 1 -5 0 -1 -10 -2 -15 -3 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 2008 2009 2008 2009 % Change Yield % Change RASM CASM RASM 10 20 15 5 10 0 5 -5 0 -5 -10 -10 -15 -15 Q4 Q1 Q2 Q3 Q4
Slide 22: Q4 09 Employee Levels Reduced by 4.8% – Average Salary Up 0.8%
Q4 09 Employee Levels Reduced by 4.8% – Average Salary Up 0.8% (Y-O-Y Change – Average Salaries & Employees) % Change Y-O-Y 4% 2% 0% -2% -4% -6% -8% Q1'09 Q2'09 Q3'09 Q4'09 Average Salaries Employees
Slide 23: Q4 09 Fuel Cost per Litre Down 24.2% While Fuel Productivity Improves 1.6%
Q4 09 Fuel Cost per Litre Down 24.2% While Fuel Productivity Improves 1.6% (Fuel Productivity & Cost per Litre) % Change Y-O-Y 50% 40% 30% 20% 10% 0% -10% -20% -30% -40% Q4'08 Q1'09 Q2'09 Q3'09 Q4'09 Fuel Productivity (ASMs/Lt) Fuel Cost (Cdn cts/Lt)
Slide 24: Q4 09 Operating Expenses Down $213M
Q4 09 Operating Expenses Down $213M – Favourable FX of $105M – Fuel Down $191M % Change Y-O-Y 30% 20% 10% 0% -10% -20% -30% r p Ba e. es IT . PA s hi i ss Mtc uel Fe &B & & zC ner mm Ms Ms F er m. od er ft. O th A/C J az SW Ow RP AS Co Co Us Fo Ac Q4 2009/2008
Slide 25: Q4 09 Unit Cost Down 9.8% on Lower Fuel & Fav. FX
Q4 09 Unit Cost Down 9.8% on Lower Fuel & Fav. FX (Cost Per ASM) % Change Y-O-Y 10% 5% 0% -5% -10% -15% Q1'09 Q2'09 Q3'09 Q4'09
Slide 26: Further Information
Further Information For further information on Air Canada's public disclosure file, including Air Canada's 2009 MD&A dated February 10, 2010 and Air Canada's Annual Information Form, consult SEDAR at sedar.com or Air Canada's website at aircanada.ca
Slide 27: Air Canada
AIR CANADA OFFICIAL SUPPORTER SUPPORTEUR OFFICIEL