2023 Consolidated Financial Statements and Notes
AIR CANADA
2023 Consolidated Financial Statements and Notes
10. PROVISIONS FOR OTHER LIABILITIES
The following table provides a continuity schedule of all recorded provisions. Current provisions are recorded in
Accounts payable and accrued liabilities.
(Canadian dollars in millions)
At December 31, 2022
Current
Maintenance (a)
Asset
retirement (b)
Litigation
Total provisions
$
36
$
$
41
$
77
Non-current
1,352
36
1,388
Provisions arising during the year
Amounts utilized
SA SA
$
1,388
$
$
162
$
SA SA
36
LA SA
$
41
$
1,465
$
4
$
166
(161)
(3)
(164)
Changes in estimated costs
3
(4)
(9)
Accretion expense
55
1
56
Foreign exchange loss (gain)
(33)
(33)
At December 31, 2023
$
1,414
$
29
29
$
38
$
1,481
Current
$
187
EA
$
SA
$
38
38
$
225
Non-current
1,227
29
1,256
$
1,414
$
29
$
38
$
1,481
(a) Maintenance provisions relate to the provision for the costs to meet the contractual return conditions on aircraft
under operating leases. The provision relates to leases with expiry dates ranging from 2024 to 2035 with the
average remaining lease term of approximately 3 years. The maintenance provisions take into account current
costs of maintenance events, estimates of inflation surrounding these costs as well as assumptions surrounding
utilization of the related aircraft. Assuming the aggregate cost for return conditions increases by 5%, holding all
other factors constant, there would be a cumulative balance sheet adjustment to increase the provision by $72
million at December 31, 2023 and an increase to maintenance expense in 2024 of approximately $9 million.
Expected future cash flows to settle the obligation are discounted. If the discount rates were to increase by 1%,
holding all other factors constant, there would be a cumulative balance sheet adjustment to decrease the provision
by $28 million at December 31, 2023. An equivalent but opposite movement in the discount rate would result in a
similar impact in the opposite direction.
(b) Under the terms of certain land and facilities leases, the Corporation has an obligation to restore the land to vacant
condition at the end of the lease and to rectify any environmental damage for which it is responsible. The related
leases expire over terms ranging from 2024 to 2078. These provisions are based on numerous assumptions
including the overall cost of decommissioning and remediation and the selection of alternative decommissioning
and remediation approaches. The non-current provision is recorded in Other long-term liabilities.
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