Air Canada 2007 Annual Report Download - page 126

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2007 Air Canada Annual Report
126
Embraer
The agreement with Embraer covers fi rm orders for 45 Embraer 190 series aircraft. The purchase agreement also contains
rights to exercise options for up to 60 additional Embraer 190 series aircraft as well as providing for conversion rights to
other Embraer models. As of December 31, 2007, 31 options remain exercisable.
The Embraer 190 series deliveries commenced in December 2005. As at December 31, 2007, 42 of the Embraer 190 series
fi rm aircraft orders have been completed and an additional aircraft was delivered in January 2008. The fi nal two Embraer
190 series fi rm aircraft are scheduled for delivery in the fi rst quarter of 2008.
The Corporation has received loan commitments from third parties for the remaining three fi rm aircraft covering
approximately 80% of the capital expenditure to be repaid in quarterly instalments for a 12-year term. Two of these aircraft
will be based on fl oating rates at the 90-day US LIBOR plus 1.90% and one will be based at the fi xed rate equivalent of the
90-day US LIBOR plus 1.70%.
Aircraft Interior Refurbishment Program
In addition to acquiring new aircraft, the Corporation commenced a major refurbishment of the interior of its existing
aircraft in April 2006. The Corporation has completed the refurbishment of 26 Airbus A319 aircraft, 30 Airbus A320 aircraft,
10 Airbus A321 aircraft and 15 Boeing 767-300 aircraft to date, for a total of 81 aircraft. The Embraer and Boeing 777 aircraft
are being delivered with the new seats and entertainment systems already installed. The capital expenditures associated
with this program, which are committed, are amortized over a fi ve-year period. A signifi cant portion of the remaining capital
expenditures relating to this program are included in the capital commitments table below.
Capital Commitments
The estimated aggregate cost of the future fi rm deliveries, and other capital purchase commitments as at December 31, 2007
including the impact of the sale and lease back transaction described above and the loan guarantee support signed in
January 2008, approximates $4,739 (of which $2,698 is subject to committed fi nancing, subject to the fulfi llment of certain
terms and conditions). US dollar amounts are converted using the December 31, 2007 noon day rate of CDN$0.9881. The
estimated aggregate cost of aircraft is based on delivery prices that include estimated escalation and, where applicable,
deferred price delivery payment interest calculated based on the 90-day US LIBOR rate at December 31, 2007.
Year ending December 31, 2008 $ 555
Year ending December 31, 2009 102
Year ending December 31, 2010 760
Year ending December 31, 2011 891
Year ending December 31, 2012 692
Thereafter 1,739
$ 4,739