Air Canada 2008 Annual Report Download - page 72

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2008 Air Canada Annual Report
72
17. SENSITIVITY OF RESULTS
Air Canada’s financial results are subject to many different internal and external factors which can have a significant
impact on operating results. In order to provide a general guideline, the following table describes, on an indicative basis,
the financial impact that changes in certain assumptions would generally have had on Air Canada’s operating results. These
guidelines were derived from 2008 levels of activity and make use of management estimates. The impacts are not additive,
do not reflect the interdependent relationship of the elements and may vary significantly 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
2008
Measure
Sensitivity Factor
Favourable/
(Unfavourable)
Estimated Operating
Income Impact
Revenue Measures
Passenger yield (cents) System 19.2 1% increase in yield $ 93
Canada 25.2 $ 39
Traffic (RPMs) (millions) System 50,519 1% increase in traffic $ 84
Canada 16,214 $ 36
Passenger load factor (%) System 81.4 1 percentage point increase $ 103
RASM (cents) System 15.6 1% increase in RASM $ 89
Cost Measures
Labour and benefits expenses ($ millions) 1,877 1% increase $ (19)
Fuel – WTI price (US$/barrel) (1)
103.9
US$1/barrel
increase to WTI $ (25)
Fuel – jet fuel price (CAD cents/litre) (1) 92.5 1% increase $ (35)
Cost per ASM (cents) 17.9 1% increase in CASM $ (111)
Currency Exchange
Cdn$ to US$ 1US$ = Cdn$ 1.23 1 cent increase
(e.g. $1.23 to $1.24) $ (30)
(1) Excludes the impact of fuel surcharges and fuel hedging. Refer to section 12 of this MD&A for information on Air Canada’s fuel derivative instruments.