Air Canada 2010 Annual Report Download - page 73

Download and view the complete annual report

Please find page 73 of the 2010 Air Canada annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 144

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144

2010 Management’s Discussion and Analysis
73
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. 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 2010
levels of activity and make use of management estimates. The impacts are not additive, do not reflect the interdependent
relationship of the elements and actual results may vary significantly due to a wide range of factors many of which are
beyond the control of Air Canada.
(Canadian dollars in millions, except where indicated)
Key Variable
2010 Measure
Sensitivity Factor
Favourable /
(Unfavourable)
Estimated Operating
Income Impact

Revenue Measures
Passenger yield (cents) System 18.1 1% increase in yield $ 88
Canada 23.8 $ 35
Traffic (RPMs) (millions) System 51,875 1% increase in traffic $ 83
Canada 15,834 $ 34
Passenger load factor (%) System 81.7 1 percentage point increase $ 102
RASM (cents) System 14.8 1% increase in RASM $ 86
Cost Measures
Fuel – WTI price (US$/barrel) (1)
78.3
US$1/barrel
increase to WTI $ (25)
Fuel – jet fuel price (CAD cents/litre) (1) 64.5 1% increase $ (24)
Cost per ASM (cents) 16.4 1% increase in CASM $ (104)
Currency Exchange
C$ to US$ C$1 = US$1.00
1 cent increase
in exchange rate
(i.e., $1.01 to $1.00
per US dollar)
$ 24
(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.
(Canadian dollars in millions)
Key Variable
2010 Measure
Sensitivity Factor
Favourable /
(Unfavourable)
Estimated Pre-Tax
Income Impact(1)

Currency Exchange
C$ to US$ C$1 = US$1.00
1 cent increase
in exchange rate
(i.e., $1.01 to $1.00
per US dollar)
$ 61
(1) Excludes the impact of foreign exchange, forward contracts and currency swaps.