Air Canada 2008 Annual Report Download - page 9

2008 Management’s Discussion and Analysis
9
3. ABOUT AIR CANADA
Air Canada is 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.
In 2008, Air Canada, together with Jazz, operated an average of approximately 1,374 scheduled flights daily and carried
approximately 33 million passengers and provided direct passenger service to 160 destinations and, through commercial
agreements with other unaffiliated regional airlines, to an additional 11 destinations, for a total of 171 direct destinations
on five continents.
Air Canada enhances its network through a capacity purchase agreement with Jazz (the “Jazz CPA”) pursuant to which
Air Canada purchases substantially all of Jazz’s fleet capacity based on predetermined rates and Air Canada determines
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.
Air Canada is a founding member of the Star Alliance® network. The Star Alliance® network currently includes 21 member
airlines and three regional member airlines. Through its membership in the Star Alliance® network, Air Canada is able to
offer its customers access to approximately 912 destinations in 159 countries, as well as reciprocal participation in frequent
flyer programs and use of airport lounges.
Through its long-term relationship with Aeroplan Limited Partnership (“Aeroplan”), Air Canada’s frequent flyer program
provider, Air Canada is able to build customer loyalty by offering those customers who are Aeroplan members the
opportunity to earn Aeroplan miles when they fly with Air Canada. Aeroplan is also Air Canada’s single largest customer.
The relationship with Aeroplan is designed to provide 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 Services”).
Air Canada Cargo provides air cargo services on domestic and US transborder flights using cargo capacity on aircraft
operated by Air Canada and Jazz in these markets. Air Canada offers international cargo services on routes between Canada
and major markets in Europe, Asia, South America and Australia using cargo capacity on Boeing 777 and other wide-body
aircraft operated by Air Canada.
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 the US) by
developing, marketing and distributing vacation travel packages and services through its website (www.aircanadavacations.
com) and a network of independent travel agencies across Canada.
Air Canada Ground Handling Services provides passenger handling services to Air Canada, Jazz and other airlines in Canada.
These services include passenger check-in, ramp services, cabin cleaning, deicing services, gate management and baggage
and cargo handling.