2023 Consolidated Financial Statements and Notes
AIR CANADA
2023 Consolidated Financial Statements and Notes
15. COMMITMENTS
Capital Commitments and Leases
Capital commitments consist of the future firm aircraft deliveries and commitments related to acquisition of other
property and equipment. The estimated aggregate cost of aircraft is based on delivery prices that include estimated
escalation. U.S. dollar amounts are converted using the December 31, 2023 closing rate of CDN$1.3243. Minimum
future commitments under these contractual arrangements are shown below.
Capital commitments include the acquisition of 18 Boeing 787-10 aircraft which Air Canada announced in 2023.
Deliveries are scheduled to begin in the fourth quarter of 2025 with the last aircraft scheduled for delivery in the first
quarter of 2027. The purchase agreement includes options for 12 additional Boeing 787-10 aircraft. This purchase
agreement substitutes for a previously announced agreement to purchase two Boeing 777 freighter aircraft and, as a
result, Air Canada will no longer take delivery of the two freighters.
Capital commitments also include the purchase of two Boeing 787-9 aircraft scheduled to be delivered in 2024 and
deliveries for the remaining 27 firm orders of Airbus A220 aircraft planned between 2024 and 2027.
Also included below are capital commitments relating to the acquisition of 30 extra-long range (XLR) versions of the
Airbus A321neo aircraft (Airbus A321XLR). Deliveries are scheduled to begin in 2025 with the final aircraft scheduled
to arrive in 2029. Of the 30 total aircraft, 15 aircraft will be leased and 15 are being acquired under a purchase
agreement with Airbus S.A.S that includes purchase rights to acquire up to 10 additional aircraft between 2027 and
2031. The amounts related to the periodic lease payments on the 15 leases are included for the periods noted. Lease
payments related to five Boeing 737 MAX 8 aircraft expected to be delivered in 2025 are also included.
(Canadian dollars in millions)
Capital commitments
2024
2025
2026
2027
2028
$ 2,000 $ 2,204 $ 4,003 $ 1,397 $
790 $
Thereafter
2,067
Total
12,461
In 2022, the Corporation announced it had entered into a purchase agreement for 30 ES-30 electric-hybrid aircraft
under development by Heart Aerospace. Due to the developing design and specifications of the aircraft, the final cost
is not yet determinable and not included in the table above, however the agreement provides for a price cap. The
regional aircraft are expected to enter service in 2028.
The Corporation leases and subleases certain aircraft and spare engines to its regional carrier, Jazz, which are charged
back to Air Canada through its capacity purchase agreement with Jazz. These are reported net on the consolidated
statement of operations. The leases and subleases relate to 15 Mitsubishi CRJ-200 aircraft, 20 Mitsubishi CRJ-900
aircraft, 25 Embraer 175 aircraft, and 13 spare engines. The lease and sublease revenue and expense related to these
aircraft and engines amount to $119 million in 2023 (2022 - $150 million).
Other Contractual Commitments
The future minimum non-cancellable commitment for the next 12 months under commercial agreements with regional
carriers is approximately $1,370 million which includes pass-through costs to sustain the minimum flying commitment.
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