Air Canada 2009 Annual Report Download - page 71

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2009 Management’s Discussion and Analysis
71
18. 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 certain assumptions would generally have had on Air Canada’s operating results. These guidelines
were derived from 2009 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.
Key Variable
2009 Measure
Sensitivity Factor
Favourable /
(Unfavourable)
Estimated Operating
Income Impact
Revenue Measures
Passenger yield (cents) System 17.7 1% increase in yield $ 80
Canada 23.0 $ 34
Traffi c (RPMs) (millions) System 47,884 1% increase in traffi c $ 76
Canada 15,544 $ 32
Passenger load factor (%) System 80.7 1 percentage point increase $ 94
RASM (cents) System 14.3 1% increase in RASM $ 78
Cost Measures
Labour and benefi ts expenses ($ millions) 1,751 1% increase $ (18)
Fuel – WTI price (US$/barrel) (1)
59.2
US$1/barrel
increase to WTI $ (25)
Fuel – jet fuel price (CAD cents/litre) (1) 57.2 1% increase $ (20)
Cost per ASM (cents) 16.9 1% increase in CASM $ (101)
Currency Exchange
Cdn$ to US$ 1US$ = Cdn$1.09 1 cent increase
(e.g. $1.09 to $1.08) $ 23
(1) Excludes the impact of fuel surcharges and fuel hedging. Refer to section 13 of this MD&A for information on Air Canada’s fuel derivative instruments.
Key Variable 2009 Measure
Sensitivity Factor
Favourable /
(Unfavourable)
Estimated Pre-Tax
Income Impact(1)
Currency Exchange
Cdn$ to US$ 1US$ = Cdn$1.09 1 cent increase
(e.g. $1.09 to $1.08) $ 57
(1) Excludes the impact of foreign exchange forward contracts and currency swaps.