Air Canada 2006 Annual Report Download - page 122

agreed to pay an amount not to exceed $16.1 million over the next eight years to compensate Air Canada
for call centre employees' share of the unfunded Air Canada pension liability. Amounts related to GSA are
recorded in the above table summarizing related party revenues and expenses under Recovery of salary,
wages, and benefit expense for employees assigned to Aeroplan, ACTS, and ACE.
Trademark License Agreement
Air Canada and Aeroplan LP have granted each other reciprocal royalty-free, non-exclusive, non-
sublicensable, non-assignable rights to use certain of each other’s trademarks around the world which
incorporate their names or logos, solely in association with the Aeroplan Program.
The Relationship between the Corporation and ACTS
ACTS is a wholly owned subsidiary of ACE that provides full-service maintenance, repair and overhaul
services to a wide range of customers.
ACTS Maintenance Agreements
Pursuant to the ACTS Maintenance Agreements and other maintenance agreements with Jazz, ACTS has
agreed to provide the following services to Air Canada and Jazz: engine and auxiliary power unit
maintenance services, aircraft heavy maintenance services (excluding line and cabin maintenance services
which are provided by Air Canada), component maintenance services, training services, supply chain
management services and other ancillary services. ACTS serves as Air Canada's exclusive repair agency
to provide certain of these services and Jazz's exclusive repair agency related to component repair and
overall work on parts which can be removed from Jazz aircraft. Jazz performs certain of its own aircraft
heavy maintenance. The amounts related to the ACTS Maintenance Agreements and other maintenance
agreements with Jazz are recorded in the above table summarizing related party revenues and expenses
under Maintenance expense from ACTS.
ACTS Master Services Agreement (MSA)
Pursuant to the master services agreement between Air Canada and ACTS (the “ACTS MSA”), Air Canada
has agreed to provide ACTS with services including infrastructure support and services which are mostly
administrative in nature, including information technology, human resources, finance and accounting, and
legal services in return for fees to be paid by ACTS to Air Canada.
These amounts are recorded in the above table summarizing related party revenues and expenses under
Revenues from corporate services and other.
ACTS Trademark License Agreement
Air Canada has granted ACTS a royalty-free, non-exclusive, non-assignable right to use certain trademarks
registered by Air Canada which incorporate the Air Canada name, and/or Air Canada's roundel design,
solely in association with the provision of heavy maintenance, component maintenance and supply chain
business services in Canada and the United States.
General Services Agreements
Pursuant to general services agreements between Air Canada and ACTS (the “ACTS GSAs”), Air Canada
provides ACTS with the services of a group of unionized and non-unionized employees of certain
departments/divisions of Air Canada. ACTS must reimburse Air Canada for all costs, including salary and
benefits, related to these employees on a fully allocated basis. These amounts are recorded in the above
table summarizing related party revenues and expenses under Recovery of salary, wages, and benefits
expense for employees assigned to ACTS.
Unless otherwise agreed to between Air Canada and ACTS, all amounts due and owing by either party to
the other are payable within thirty days of the invoice date.
Building Sale to ACTS
Air Canada and ACTS are finalizing the sale of a building from Air Canada to ACTS that is expected to be
executed in Quarter 1 2007. As a result of the anticipated sale, Air Canada recorded an impairment loss on
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