Air Canada 2009 Annual Report Download - page 76

2009 Air Canada Annual Report
76
Airport User Fees and Air Navigation Fees
With the privatization of airports and air navigation authorities over the last decade in Canada, new airport and air navigation
authorities have imposed signifi cant increases in their fees. Though certain authorities have implemented some fee reductions,
if authorities in Canada or elsewhere were to increase their fees Air Canada, its business, results from operations and fi nancial
condition could be materially adversely affected.
Strategic, Business, Technology and Other Important Initiatives
In order to operate its business, achieve its goals and remain competitive, Air Canada continuously seeks to identify and
devise, invest in and implement strategic, business, technology and other important initiatives, such as those relating to the
aircraft fl eet restructuring program, business process initiatives, information technology initiatives and others. These initiatives,
including activities relating to their development and implementation, may be adversely impacted by a wide range of factors,
many of which are beyond Air Canada’s control. Such factors include the performance of third parties, including suppliers, the
implementation and integration of such initiatives into Air Canada’s other activities and processes as well as the adoption and
acceptance of initiatives by Air Canada’s customers, suppliers and personnel. A delay or failure to suffi ciently and successfully
identify and devise, invest in or implement these initiatives could adversely affect Air Canada’s ability to operate its business,
achieve its goals and remain competitive and could have a material adverse effect on Air Canada, its business, results from
operations and fi nancial condition.
For instance, a key component of Air Canada’s business plan is the completion of Air Canada’s fl eet restructuring program
through the acquisition of new and more effi cient Boeing 787 aircraft. A delay or failure in the completion of Air Canada’s fl eet
restructuring, including further delays by the manufacturers in the delivery of the wide-body aircraft, or an inability to remove,
as planned, certain aircraft from the fl eet in coordination with the planned entry into service of new aircraft, could adversely
affect the implementation of Air Canada’s business plan which may, in turn, have a material adverse effect on Air Canada, its
business, results from operations and fi nancial condition.
Dependence on Technology
Air Canada relies heavily on technology, including computer and telecommunications equipment and software and Internet-
based systems, to operate its business, increase its revenues and reduce its costs. These systems include those relating to
Air Canada’s telecommunications, websites, computerized airline reservations and airport customer services and fl ight operations.
These technology systems may be vulnerable to a variety of sources of failure, interruption or misuse, including by reason
of third party suppliers’ acts or omissions, natural disasters, terrorist attacks, telecommunications failures, power failures,
computer viruses, unauthorized or fraudulent users, and other operational and security issues. While Air Canada continues
to invest in initiatives, including security initiatives and disaster recovery plans, these measures may not be adequate or
implemented properly. Any such technology systems failure, interruption or misuse could materially and adversely affect Air
Canada’s operations and could have a material adverse effect on Air Canada, its business, results from operations and fi nancial
condition.
Key Supplies and Suppliers
The Corporation is dependent upon its ability to source, on favourable terms and costs, suffi cient quantities of goods and
Air Canada is dependent upon its ability to source, on favourable terms and costs, suffi cient quantities of goods and services
in a timely manner, including those available at airports or from airport authorities or otherwise required for Air Canada’s
operations such as fuel, aircraft and related parts and aircraft maintenance services (including maintenance services obtained
from Aveos). In certain cases, Air Canada may only be able to access goods and services from a limited number of suppliers and
transition to new suppliers may take signifi cant amounts of time and require signifi cant resources. A failure, refusal or inability
of a supplier may arise as a result of a wide range of causes, many of which are beyond Air Canada’s control. In addition, in
the context of the current economic climate, there can be no assurance as to the continued viability of any of Air Canada’s
suppliers. Any failure or inability of Air Canada to successfully source goods and services, including by reason of a failure, refusal
or inability of a supplier, or to source goods and services on terms and pricing and within the timeframes acceptable to Air
Canada, could have a material adverse effect on Air Canada, its business, results from operations and fi nancial condition.