Air Canada 2014 Annual Report Download - page 28

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28 2014 Annual Report
CASM (EXCLUDING THE IMPACT OF BENEFIT PLAN AMENDMENTS) DECREASED
2.4% FROM 2013. ADJUSTED CASM DECREASED 2.6% FROM 2013
The following table compares Air Canada’s CASM for 2014 versus 2013.
CENTS PER ASM
FULL YEAR CHANGE
2014 2013 cents %
Aircraft fuel 5.07 5.15 (0.08) (1.6)
Wages and salaries 2.42 2.48 (0.06) (2.4)
Benefits 0.67 0.79 (0.12) (15.2)
Benefit plan amendments (1) -(0.12) 0.12 100.0
Capacity purchase agreements 1.60 1.64 (0.04) (2.4)
Airport and navigation fees 1.40 1.43 (0.03) (2.1)
Aircraft maintenance 0.99 0.92 0.07 7.6
Sales and distribution costs 0.91 0.89 0.02 2.2
Depreciation, amortization and impairment 0.73 0.84 (0.11) (13.1)
Ground package costs 0.51 0.48 0.03 6.3
Aircraft rent 0.42 0.46 (0.04) (8.7)
Food, beverages and supplies 0.42 0.42 - -
Communications and information technology 0.28 0.28 - -
Other 1.44 1.49 (0.05) (3.4)
CASM 16.86 17.15 (0.29) (1.7)
Remove:
Benefit plan amendments (1) -0.12 (0.12) (100.0)
CASM (excluding the impact of
benefit plan amendments) 16.86 17.27 (0.41) (2.4)
1 In 2013, Air Canada recorded an operating expense reduction of $82 million related to amendments to defined benefit pension plans.
CASM 16.86 17.15 (0.29) (1.7)
Remove:
Fuel expense, ground package costs at
Air Canada Vacations, benefit plan
amendments and unusual items (1)(2)(3)(4)
(5.57) (5.55) (0.02) (0.4)
ADJUSTED CASM (5) 11.29 11.60 (0.31) (2.6)
1 In 2013, Air Canada recorded an operating expense reduction of $82 million related to amendments to defined benefit pension plans.
2 In 2013, Air Canada recorded impairment charges amounting to $30 million.
3 In 2014, Air Canada recorded favourable tax-related provision adjustments of $41 million.
4 In 2014, one-time payments totaling $30 million were made to ACPA members under a collective agreement concluded in October 2014.
5 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 6% FROM 2013
In 2014, operating expenses of $12,457 million increased $694 million or 6% from 2013 on capacity growth
of 7.8%. The unfavourable impact of a weaker Canadian dollar on foreign currency denominated operating
expenses (mainly U.S. dollars) in 2014, when compared to 2013, increased operating expenses by approximately
$397 million. Refer to section 12 “Financial Instruments and Risk Management” of this MD&A for information
on Air Canada’s foreign exchange risk management strategy. In 2013, Air Canada recorded an operating expense
reduction of $82 million in Benefit plan amendments and impairment charges amounting to $30 million in
Depreciation, amortization and impairment expense.