Air Canada 2007 Annual Report Download - page 10

2007 Air Canada Annual Report
10
3. OUR STRATEGY
The Air Canada Business
We are Canada’s largest domestic and international airline and the largest provider of scheduled passenger services in the
Canadian market, the Canada-US transborder market and in the international market to and from Canada.
We enhance our network through a capacity purchase agreement with Jazz pursuant to which we purchase substantially
all of Jazz’s fl eet capacity based on predetermined rates and we determine the routes and schedule operated by Jazz. Jazz
operates small jet and turboprop aircraft that have lower trip costs than conventional large jet aircraft, allowing Jazz to
provide service to Air Canada’s customers in lower density markets and also in higher density markets at off-peak times
throughout Canada and the United States.
In 2007, Air Canada, together with Jazz, operated an average of approximately 1,370 scheduled fl ights each day and carried
over 33 million passengers. Air Canada, together with Jazz, provided direct passenger service to 158 destinations and,
through commercial agreements with other unaffi liated regional airlines, to an additional 14 destinations, for a total of 172
direct destinations on fi ve continents.
We are a founding member of the Star Alliance® network. The Star Alliance® network currently includes 19 member
airlines and three regional member airlines. Through its membership in the Star Alliance® network, we are able to offer our
customers access to approximately 897 destinations in 160 countries, as well as reciprocal participation in frequent fl yer
programs and use of airport lounges.
Through our long-term relationship with Aeroplan Limited Partnership (“Aeroplan”), Air Canada’s frequent fl yer program
provider, we are able to build customer loyalty by offering those customers who are Aeroplan members the opportunity to
earn Aeroplan miles when they fl y with Air Canada. Aeroplan is also Air Canada’s single largest customer. The relationship
with Aeroplan provides a long-term stable and recurring source of revenue from the purchase by Aeroplan of Air Canada
seats to be provided to Aeroplan members who choose to redeem their Aeroplan miles for air travel rewards.
The Corporation also generates revenues from cargo services provided by Air Canada and AC Cargo Limited Partnership
(“Air Canada Cargo”), from tour operator services provided by Touram Limited Partnership (“Air Canada Vacations”) and
from ground handling services provided by ACGHS Limited Partnership (“Air Canada Ground Handling”).
Air Canada and Air Canada Cargo provide air cargo services on domestic, US transborder and international fl ights. 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 fl ights and
currently uses one chartered all freighter MD-11 aircraft to supplement Canada-Europe services.
Air Canada Vacations is one of Canada’s leading tour operators. Based in Montreal and Toronto, Air Canada Vacations
operates its business in the outgoing leisure travel market (Caribbean, Mexico, Europe, South America and US) through
developing, marketing and distributing vacation travel packages and services through a network of independent travel
agencies in Canada as well as its website, aircanadavacations.com.
Air Canada Ground Handling 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.