2023 Consolidated Financial Statements and Notes
AIR CANADA
2023 Consolidated Financial Statements and Notes
Key assumptions used for the fair value less cost to dispose calculations in fiscal 2021 were as follows:
Key
Assumption
2021
Average
9.25%
discount rate
Long-term
growth rate
2.5%
Jet fuel price
US$92 US$97
range per barrel
Approach used to determine values
Derived from market participant assumptions regarding the Corporation's weighted
average cost of capital adjusted for taxes and specific risks applicable to each cash-
generating unit being tested.
Inputs to the various scenarios ranged from 9.5%-11% for the wide-body CGU and
7.5%-9% for the narrow-body CGU.
Cash flows beyond the five-year period are projected to increase at 2.5% consistent
with the long-term growth assumption of the airline industry considering various factors
such as the Corporation's fleet plans and industry growth assumptions.
Jet fuel prices are assumed to follow the global market recovery and represent
management's best estimate of the range of future market conditions.
Emerging issues in climate-related matters, such as change in regulations, may impact
this assumption in future years.
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