Air Canada 2009 Annual Report Download - page 78

2009 Air Canada Annual Report
78
Superior Court of Justice proceedings, Jazz commenced judicial review proceedings against the Toronto Port Authority (“TPA”)
before the Federal Court of Canada relating to Jazz’s access to the TCCA. The Porter Defendants were granted intervener and
party status in these proceedings. In January of 2008, Porter fi led a defence and counterclaim against Jazz and Air Canada
making allegations and seeking conclusions similar to those in the Ontario Superior Court counterclaim. On October 16, 2009,
Jazz discontinued its suit in the Ontario Superior Court against Porter. However, Jazz is continuing its proceedings in the Federal
Court of Canada against the TPA, to which Porter intervened. The counterclaim fi led by Porter in the Ontario Court against
Jazz and Air Canada has been stayed pending the outcome of the mirror counterclaim in the Federal Court. Management views
Porter’s counterclaims in both jurisdictions as being without merit.
The Canadian Union of Public Employees (“CUPE”), which represents Air Canada’s fl ight attendants, has fi led a complaint before
the Canadian Human Rights Commission where it alleges gender-based wage discrimination. CUPE claims the predominantly
female fl ight attendant group should be paid the same as the predominantly male pilot and mechanics groups because their
work is of equal value. The complaint dates from 1991 but has not been investigated on the merits because of a legal dispute
over whether the three groups work in the same “establishment” within the meaning of the Canadian Human Rights Act.
On January 26, 2006, the Supreme Court of Canada ruled that they do work in the same “establishment” and sent the case
back to the Canadian Human Rights Commission, which may now proceed to assess the merits of CUPE’s complaint. On
March 16, 2007, the Canadian Human Rights Commission referred the complaint against Air Canada for investigation.
Air Canada considers that any investigation will show that it is complying with the equal pay provisions of the Canadian
Human Rights Act, however, Management has determined that it is not possible at this time to predict with any degree of
certainty the fi nal outcome of the Commission’s investigation.
Air Canada is engaged in a number of proceedings involving challenges to the mandatory retirement provisions of certain
of its collective agreements, including the Air Canada-Air Canada Pilots Association collective agreement which incorporate
provisions of the pension plan terms and conditions applicable to pilots requiring them to retire at age 60. Air Canada
is defending these challenges. At this time, it is not possible to determine with any degree of certainty the extent of any
fi nancial liability that may arise from Air Canada being unsuccessful in its defense of these proceedings, though any such
fi nancial liability, if imposed, would not be expected to be material.
Future Legal Proceedings
Airlines are susceptible to various claims and litigation, including class action claims, in the course of operating their
business or with respect to the interpretation of existing agreements. Any future claims or litigation could also have a
material adverse effect on Air Canada, its business and results from operations.
Key Personnel
Air Canada is dependent on the experience and industry knowledge of its executive offi cers and other key employees to
execute its business plan. If Air Canada were to experience a substantial turnover in its leadership or other key employees,
Air Canada’s business, results from operations and fi nancial condition could be materially adversely affected. Additionally,
Air Canada may be unable to attract and retain additional qualifi ed key personnel as needed in the future.
Risks relating to the airline industry
Terrorist Attacks and Security Measures
The September 11, 2001 terrorist attacks and subsequent terrorist activity, notably in the Middle East, Southeast Asia, Europe
and the U.S., causes uncertainty in the minds of the traveling public. The occurrence of a terrorist attack (or attempted attacks)
(whether domestic or international and whether involving Air Canada or another carrier or no carrier at all) and increasingly
restrictive security measures, such as current restrictions on the content of carry-on baggage, current or proposed passenger
identifi cation document requirements, and passenger screening procedures could have a material adverse effect on passenger
demand for air travel and on the number of passengers traveling on Air Canada’s fl ights. It could also lead to a substantial
increase in insurance, airport security and other costs. Any resulting reduction in passenger revenues and/or increases in
insurance, security or other costs could have a material adverse effect on Air Canada, its business, results from operations and
fi nancial condition.