Air Canada 2007 Annual Report Download - page 64

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2007 Air Canada Annual Report
64
16. SENSITIVITY OF RESULTS
Air Canada’s fi nancial results are subject to many different internal and external factors which can have a signifi cant impact
on operating results. In order to provide a general guideline, the following table describes, on an indicative basis, the fi nancial
impact that changes in operating assumptions would generally have had on Air Canada (previously “Air Canada Services”)
operating results. These guidelines were derived from 2007 levels of activity and make use of management estimates. The
impacts are not additive, do not refl ect the interdependent relationship of the elements and may vary signifi cantly from
actual results due to factors beyond the control of Air Canada. Conversely, an opposite change in the sensitivity factor would
have had the opposite effect on operating income.
($ millions)
Key Variable
2007 Measure
Sensitivity factor
Favourable /
(Unfavourable)
Estimated Operating
Income Impact
Revenue Measures
Passenger yield (cents) System 18.4 1% increase in yield $ 89
Canada 24.3 $ 38
Traffi c (RPMs) (millions) System 50,629 1% increase in traffi c $ 81
Canada 16,284 $ 34
Passenger load factor System 80.6 1 percentage point increase $ 101
RASM (cents) System 14.8 1% increase in RASM $ 85
Cost Measures
Labour and benefi ts expenses ($ millions) 1,920 1% increase $ (19 )
Fuel – WTI price
(US$/barrel) (1)
69.9
US$1/barrel
increase to WTI $ (26 )
Fuel – jet fuel price (Cdn cents/litre) (1) 66.3 1% increase $ (26 )
Cost per ASM (cents) 16.3 1% increase in CASM $ (102 )
(1) Excludes the impact of fuel surcharges and fuel hedging.
($ millions)
Key Variable
2007 Measure
Sensitivity Factor
Favourable / (Unfavourable)
Estimated Operating
Income Impact
Estimated Pre-Tax
Income Impact (1)
Currency Exchange
Cdn$ to US$ 1US$ = Cdn$ 0.99 1 cent increase
(e.g. $0.99 to $0.98)
$ 25 $ 72
(1) Excludes the impact of foreign exchange forward contracts and currency swaps.