Investor Presentaiton
- 28-
identification showing name, date of birth and gender prior to boarding an aircraft. These measures will come into force
for international flights as of June 4, 2007. Air Canada had proactively implemented similar procedures since the
events of September 11, 2001.
Air Canada continues to work with the appropriate authorities to ensure full compliance with regulatory
requirements, including new programs that will affect the airline industry:
•
Air Canada is the first carrier in Canada to provide Transport Canada with a security management
system. The security management system includes an oversight cycle that promotes compliance and
conformity. It is also linked to a performance plan based on resilience and loss prevention.
Air Canada is fully prepared to implement the new measures imposed by Transport Canada under the
Passenger Protect Program as Air Canada already complies with similar requirements imposed by the
Transport Security Agency ("TSA"), a U.S. government agency, for its "No Fly" and "Selectee" lists.
Accordingly, the coming into force of the identity screening regulation is expected to have minimal, if
any, impact on the operations of Air Canada as Air Canada had proactively implemented these
procedures since the events of September 11, 2001.
Air Canada is also working with the Canadian Air Transport Security Agency ("CATSA") and other
agencies to continuously improve security measures and to ensure that any innovation adopted by Air
Canada maintains the highest degree of security.
Debt Financing
On October 12, 2006, Air Canada entered into an amended and restated credit agreement (the "Amended and
Restated Credit Agreement") with a syndicate of lenders (the "Lenders") and an administrative agent (the "Agent").
The Amended and Restated Credit Agreement was intended to amend and restate the credit agreement entered into by
Air Canada dated April 6, 2005 with a syndicate of lenders and the Agent.
At the closing of the Initial Public Offering, a $400 million senior secured revolving credit facility (the "Amended
Credit Facility") was established in favour of Air Canada pursuant to the Amended and Restated Credit Agreement for
working capital and general corporate purposes, of which up to $100 million may be used for the issuance of letters of
credit provided exclusively by the Agent and of which up to $20 million may be used as a swingline facility provided
exclusively by the Agent for cash management and working capital purposes. As at March 27, 2007, there was no
amount drawn under the Amended Credit Facility. The total amount available for borrowing under the Amended Credit
Facility is subject to a borrowing base restriction based on certain percentages of the values of eligible accounts
receivable and eligible real estate. The accounts receivable of Air Canada Cargo are also eligible for inclusion in the
borrowing base if Air Canada Cargo provides the Agent and the Lenders with a guarantee of Air Canada's obligations
under the Amended Credit Facility together with a first priority security interest over its present and after-acquired
personal property, subject to certain exclusions and permitted liens, as security for its guarantee obligations.
The Amended Credit Facility has a three year term that can be extended at Air Canada's option for additional one-
year periods on each anniversary of the closing of the Initial Public Offering, subject to prior approval of Lenders
holding no less than two thirds of the total commitments under the Amended Credit Facility. Any non-consenting
Lenders will be allowed to withdraw from the Amended Credit Facility at the maturity date and may be replaced by
other lenders; provided, however that the maturity date will not be so extended if the non-consenting Lenders hold in
excess of one third of the total commitments under the Amended Credit Facility.
The Amended and Restated Credit Agreement is secured by a first priority security interest and hypothec over the
present and after-acquired personal property of Air Canada, subject to certain exclusions and permitted liens, and by a
first priority charge and hypothec over certain owned and leased real property of Air Canada. Air Canada's obligations
under the Amended Credit Facility are also guaranteed by 1209265 Alberta Ltd., a subsidiary of Air Canada, which has
provided a first priority security interest over its present and after-acquired personal property, subject to certain
exclusions and permitted liens, as security for its guarantee obligations.
The Amended and Restated Credit Agreement contains customary representations and warranties and is subject to
customary terms and conditions (including negative covenants, financial covenants and events of default) for
borrowings of this nature, including limitations on paying distributions (including upon the occurrence and during the
continuance of an event of default under the Amended and Restated Credit Agreement).View entire presentation