Investor Presentaiton
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The fleet of Covered Aircraft operated as at December 31, 2006 by Jazz on behalf of Air Canada pursuant to the
Jazz CPA is shown below:
Bombardier CRJ Aircraft
Number of Covered
Aircraft under
the Jazz CPA
as at December 31,
2006
Bombardier CRJ-100..
25
Bombardier CRJ-200..
33
Bombardier CRJ-705.
15
Total Bombardier CRJ Aircraft.
73
Bombardier Dash-8 Aircraft:
Bombardier Dash 8-300.
Bombardier Dash 8-100.
Total Turboprop Aircraft.
Total Covered Aircraft.
26
34
60
133
Fuel
Aircraft fuel is a major expense in the airline industry. During the period from January 1, 2006 to December 31,
2006, the price of Western Texas Intermediate ("WTI") crude oil ranged from a low of US$55.86 to a high of
US$76.95. Fuel prices continue to be susceptible to factors such as political unrest in various parts of the world,
Organization of Petroleum Exporting Countries (OPEC) policy, the level of demand from emerging economies such as
China, the level of inventory carried by the industry, the level of fuel reserves maintained by governments, disruptions
to production and refining facilities, alternative fuels and the weather. Based on 2006 volumes and US exchange rates,
Management estimated that a US$1 per barrel movement in the price of WTI crude oil or in the refining spread
between WTI and jet fuel impacted 2006 fuel expense by approximately C$27 million or US$24 million (excluding the
impact of fuel surcharges and fuel hedging).
In order to manage the airline's exposure to the volatility of jet fuel prices, the Corporation has hedged a portion of
its 2007 anticipated jet fuel requirements using mostly swap and collar option structures. The swap structure allows the
Corporation to fix jet fuel price at a specific level, whereas the collar option structure creates a ceiling and a floor price,
allowing the Corporation to protect itself against prices above the ceiling but exposing the Corporation to the floor if
the price falls below the floor. As at December 31, 2006, the Corporation had 39% of its fuel requirement for 2007
hedged at prices that can fluctuate between an average of US$74 to US$85 per barrel for its heating oil-based contracts,
an average of US$58 to US$69 per barrel for its WTI crude oil-based contracts and an average of US$81 to US$85 for
jet-fuel based contracts. Since December 31, 2006, the Corporation has entered into new hedging positions, using collar
option structures, which have added 5% coverage to 2007 increasing the total hedged volume for 2007 to 44%, as well
as an additional 1% coverage to 2008. As at March 27, 2007, for 2007, the Corporation has hedged its projected fuel
requirements as follows: 57% for the first quarter of 2007, 44% for the second quarter of 2007, 36% for the third
quarter of 2007 and 39% for the fourth quarter of 2007.
Star Alliance®
Air Canada is a founding member of the Star AllianceⓇ network, the world's largest airline alliance group. Air
Canada operates an extended global network in conjunction with its international partners.
Since its inception in 1997, the Star AllianceⓇ network has grown to include as of February 2007 the following 17
airlines: Air Canada, Air New Zealand, All Nippon Airways, Asiana Airlines, Austrian Airlines, bmi, LOT Polish
Airlines, Lufthansa, SAS, Singapore Airlines, South African Airways, Spanair, Swiss International Airlines, Thai
Airways, US Airways, United Airlines and TAP Portugal. The Star AllianceⓇ network also includes three regional
members: Adria Airways, Blue 1 and Croatia Airlines.
As of February 2007, through Air Canada's strategic and commercial arrangements with Star Alliance® members
and several other airlines, Air Canada's customers have access to over 855 destinations in 155 countries, with reciprocalView entire presentation