Air Canada 2006 Annual Report Download - page 78

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served either directly or through the Star Alliance network. In addition, Air Canada provides certain charter
services.
Air Canada and Air Canada Cargo provide air cargo services on domestic, US transborder and international
flights. Air Canada Cargo is a major domestic and US transborder air cargo carrier and uses the entire cargo
capacity on aircraft operated by Air Canada and Jazz on domestic and transborder routes. Air Canada offers
cargo services on its international flights and currently uses two chartered all freighter aircraft to supplement
Canada-Europe and Canada-Asia services. Air Canada Cargo manages all international cargo and freighter
operations on behalf of Air Canada.
Air Canada Ground Handling Services provides passenger handling services to Air Canada, Jazz and other
airlines with a primary focus on Canadian stations. Services covered include passenger check-in, gate
management, baggage and cargo handling and processing, cabin cleaning, de-icing as well as aircraft ramp
services.
Air Canada Vacations is a major Canadian tour operator providing tour operator services and vacation
packages which include air transportation supplied by Air Canada, hotel accommodations, car rentals and
cruises. Air Canada Vacations also sells surplus seat inventory to travel agents under the trade name Netair.
Jazz is a regional carrier which, pursuant to the Jazz CPA, provides service to Air Canada’s customers in lower
density markets and in higher density markets at off-peak times throughout Canada and to certain destinations
in the United States. Jazz focuses on flight operations and customer service and Air Canada is responsible for
scheduling, marketing, pricing and related commercial activities of the regional operations. Under the Jazz CPA,
Jazz records revenues from Air Canada based upon fees relating to flight operations performed, passengers
carried and other items covered by the agreement. These inter-company transactions are eliminated in these
combined consolidated financial statements. The Air Canada Services segment records the revenue on flights
operated under the Jazz CPA in Passenger revenue. However, since all distributions from Jazz are made to its
partners, ACE and Jazz Air Income Fund ("Jazz Fund"), all income from Jazz is allocated to the non-controlling
interest in the combined consolidated statement of operations. Distributions for the year ended 2006 of $98 are
reflected as a reduction of the non-controlling interest on the balance sheet.
78