Air Canada 2007 Annual Report Download - page 137

Consolidated Financial Statements and Notes
137
ACTS Aero and Jazz are parties to a component maintenance agreement (the “ACTS-Jazz Agreement”) dated
August 1, 2005, pursuant to which ACTS Aero provides selected maintenance, repair, overhaul and related services
with respect to Jazz’s CRJ aircraft. Pursuant to the ACTS-Jazz Agreement, ACTS Aero serves as Jazz’s exclusive repair
agency to provide component repair and overhaul work on parts which can be removed from the aircraft in respect of
CRJ-100/200 and common CRJ-705 parts not performed internally by Jazz employees. The initial term of the
ACTS-Jazz Agreement expires in August 2015 and it is renewable for three successive two-year periods. 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. Jazz amounts
with ACTS are not reported for the period after deconsolidation on May 24, 2007.
ACTS Master Services Agreement (ACTS MSA)
ACTS Aero and Air Canada are parties to an amended and restated master services agreement (the “ACTS MSA”),
effective January 1, 2007, pursuant to which the Corporation provides ACTS Aero with services including infrastructure
support and services which are mostly administrative in nature, including information technology, human resources,
fi nance and accounting, and claims services in return for fees paid by ACTS Aero to the Corporation. ACTS Aero may
elect to terminate any services under the ACTS MSA or the entire ACTS MSA upon six months’ prior written notice,
with the exception of services relating to information technology which ACTS Aero cannot terminate prior to the
expiry of the ACTS MSA. Air Canada may elect to terminate any services under the ACTS MSA or the entire ACTS
MSA upon 18 months’ prior written notice. 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
ACTS Aero and Air Canada are parties to a trademark license agreement (the “ACTS Trademark License Agreement”),
effective September 30, 2004, pursuant to which the Corporation has granted ACTS Aero a royalty-free, non-exclusive,
non-assignable right to use certain Air Canada trademarks which incorporate the Air Canada name, and 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. The ACTS Trademark License Agreement was amended on
closing of the sale of ACTS LP to provide for the termination of the agreement on October 16, 2008.
ACTS General Services Agreements
ACTS Aero and Air Canada are parties to an amended and restated general services agreement (the “ACTS GSA”),
effective as of June 22, 2007, pursuant to which the Corporation provides ACTS Aero with the services of a group
of unionized employees for which the Corporation is reimbursed by ACTS Aero for all costs, including salary and
benefi ts, on a fully allocated basis. The ACTS GSA may be terminated by either party at any time upon 30 days’ prior
written notice.
Real Estate Agreements
As part of the closing of the monetization of ACTS LP, Air Canada sold a building to ACTS Aero for proceeds of $28
effective as of October 16, 2007. In connection with the sale, Air Canada and ACTS Aero entered into a land sublease
for certain land contiguous with the building and a service contract whereby the Corporation provides ACTS Aero
certain services related to the operation of the building.