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16. SENSITIVITY OF RESULTS
Financial results of the Air Canada Services segment are subject to many different internal and external factors
which can have a significant impact on operating results. In order to provide a general guideline, the following
table describes, on an indicative basis, the financial impact that changes in operating assumptions would
generally have had on the Air Canada Services segment operating results. These guidelines were derived from
2006 levels of activity and make use of Management estimates. The impacts are not additive, do not reflect the
interdependent relationship of the elements and may vary significantly from actual results due to factors beyond
the control of the Air Canada Services segment. Conversely, an opposite change in the sensitivity factor would
have had the opposite effect on operating income.
2006
Estimated Operating
Income Impact
Key Variable Measure ($ millions)
Revenue Measures
Passenger yield (cents) System 18.1
84
Canada 23.7
35
Traffic (RPMs) (millions) System 48,993
76
Canada 15,465
31
Passenger load factor System 80.2 1 percentage point change
95
RASM (cents) System 14.5 1% change in RASM
80
Cost Measures
Labour and benefits expenses
($ millions)
1,816 1% change
18
Fuel – WTI price (US$/barrel)
(1) 65.8 US$1/barrel change to WTI
27
Fuel – jet fuel price (CAD cents/litre) (1) 65.0 1% change
25
Cost per ASM (cents) 16.4 1% change
100
1% change in yield
1% change in traffic
Sensitivity
factor
(1) Excludes impact of fuel surcharges and fuel hedging.
2006
Estimated Operating
Income Impact
Estimated Pre-Tax
Income Impact
Key Variable Measure ($ millions) ($ millions)
Currency Exchange
Canada to US ($) 1.13 1 cent change 16 48
(e.g. $1.13 to $1.12)
Sensitivity
factor
54