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2008 Management’s Discussion and Analysis
7
2. INTRODUCTION
In this Management’s Discussion and Analysis of Results of Operations and Financial Condition (“MD&A”), the “Corporation”
refers to, as the context may require, Air Canada and/or one or more of Air Canada’s subsidiaries.
This 2008 MD&A provides the reader with a view of Air Canada from the perspective of management and includes an
overview of Air Canada’s business strategy, an analysis of Air Canada’s financial results for the fourth quarter of 2008 and for
the full year 2008, the risks and uncertainties associated with its business and a discussion on its controls and procedures.
This MD&A should be read in conjunction with Air Canada’s 2008 audited consolidated financial statements and notes. All
financial information has been prepared in accordance with Generally Accepted Accounting Principles in Canada (“GAAP”),
unless indicated otherwise. Air Canada’s audited consolidated financial statements are based on accounting policies
consistent with those disclosed in Note 2 to the Corporation’s annual audited consolidated financial statements for 2008.
Prior to May 24, 2007, Air Canada’s consolidated financial statements included the financial position, results of operations
and cash flows of Jazz Air LP (“Jazz”) as Air Canada was deemed to be the primary beneficiary of Jazz under Accounting
Guideline 15 “Consolidation of Variable Interest Entities” (“AcG-15”). The distribution by ACE Aviation Holdings Inc. (“ACE”)
of units of Jazz Air Income Fund on May 24, 2007 gave rise to a reconsideration of which entity should consolidate Jazz and,
as a result, Jazz Air Income Fund was deemed to be the primary beneficiary of Jazz under AcG-15. Effective May 24, 2007,
the results and financial position of Jazz are no longer consolidated within Air Canada.
Prior to May 24, 2007, Air Canada had two reportable segments: Air Canada Services (which is now referred to as Air
Canada), the passenger and cargo transportation service business operated by Air Canada and related ancillary services,
and Jazz, Air Canada’s regional capacity provider. Segment information provided useful information to shareholders as it
enabled them to distinguish between the results of operations, cash and other assets and liabilities of the two segments.
Certain comparative figures have been reclassified to conform to the financial statement presentation adopted in the
current year.
Except as otherwise noted, all monetary amounts are stated in Canadian dollars. For an explanation of certain terms used
in this MD&A, refer to section 21 “Glossary”. Except as otherwise noted, this MD&A is current as of February 12, 2009.
Forward-looking statements are included in this MD&A. See “Caution Regarding Forward-Looking Information” below for a
discussion of risks, uncertainties and assumptions relating to these statements. For a description of the risks relating to the
Corporation, see section 18 “Risk Factors” of this MD&A.
The Corporation issued a news release dated February 13, 2009 reporting on its results for the fourth quarter of 2008. This
news release is available on www.sedar.com and on www.aircanada.com.
For further information on Air Canada’s public disclosure file, including Air Canada’s Annual Information Form, consult
SEDAR at www.sedar.com or Air Canada’s website at www.aircanada.com.