Air Canada 2013 Annual Report Download - page 25

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2013 Management’s Discussion and Analysis
25
CASM (excluding benefit plan amendments) decreased 1.5% from 2012. Adjusted CASM decreased 1.5% from
2012
The following table compares Air Canada’s 2013 and 2012 CASM.
Full Year Change
(cents per ASM) 2013 2012 cents %
Aircraft fuel 5.15 5.29 (0.14) (2.6)
Wages and salaries 2.48 2.41 0.07 2.9
Benefits 0.67 0.72 (0.05) (6.9)
Benefit plan amendments(1) (0.12) (0.19) 0.07 36.8
Capacity purchase agreements 1.64 1.59 0.05 3.1
Airport and navigation fees 1.43 1.47 (0.04) (2.7)
Aircraft maintenance 0.92 1.00 (0.08) (8.0)
Sales and distribution costs 0.89 0.90 (0.01) (1.1)
Depreciation, amortization and impairment 0.84 0.99 (0.15) (15.2)
Aircraft rent 0.46 0.50 (0.04) (8.0)
Food, beverages and supplies 0.42 0.43 (0.01) (2.3)
Communications and information technology 0.28 0.28 – –
Other 2.09 1.96 0.13 6.6
CASM 17.15 17.35 (0.20) (1.1)
Remove:
Benefit plan amendments(1) 0.12 0.19 (0.07) (36.8)
CASM (excluding benefit plan amendments) 17.27 17.54 (0.27) (1.5)
(1) In 2013, Air Canada recorded an operating expense reduction of $82 million related to amendments to defined benefit pension plans. In 2012, Air Canada recorded an
operating expense reduction of $127 million related to changes to the terms of the ACPA collective agreement pertaining to retirement age.
CASM 17.15 17.35 (0.20) (1.1)
Remove:
Fuel expense, the cost of ground packages at Air Canada Vacations,
benefit plan amendments and impairment charges (5.55) (5.57) 0.02 (0.4)
Adjusted CASM(1) 11.60 11.78 (0.18) (1.5)
(1) Adjusted CASM is a non-GAAP financial measure. Refer to section 20 “Non-GAAP Financial Measures” of this MD&A for additional information.
Operating expenses increased 1% from 2012
In 2013, operating expenses of $11,763 million increased $91 million or 1% from 2012, mainly reflecting increases in wages,
salaries and benefits and capacity purchase costs. In addition, the result of an unfavourable impact of a weaker Canadian
dollar on foreign currency denominated operating expenses (mainly U.S. dollars), when compared to 2012, increased
operating expenses by $147 million. Furthermore, Air Canada recorded an operating expense reduction of $82 million in
benefit plan amendments in 2013 versus an operating expense reduction of $127 million in 2012, an unfavourable variance of
$45 million. Partly offsetting these increases was the impact of lower jet fuel prices and a reduction in the volume of fuel
consumed, as well as decreases in depreciation, amortization and impairment, aircraft maintenance and aircraft rent expenses.
Fuel expense decreased 1% from 2012
In 2013, fuel expense of $3,534 million decreased $27 million or 1% from 2012. The decrease in fuel expense was mainly due
to lower jet fuel prices, which accounted for a decrease of $84 million, and a lower volume of fuel consumed assisted by the
airline’s fuel efficiency program, which accounted for a decrease of $25 million. Partly offsetting these decreases was the
unfavourable impact of a weaker Canadian dollar versus the U.S. dollar when compared to 2012, which accounted for an
increase of $82 million to fuel expense in 2013.