Air Canada 2014 Annual Report Download - page 40

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40 2014 Annual Report
CASM (EXCLUDING THE IMPACT OF BENEFIT PLAN AMENDMENTS) DECREASED 2.8%
FROM THE FOURTH QUARTER OF 2013. ADJUSTED CASM WAS UNCHANGED FROM
THE FOURTH QUARTER OF 2013
The following table compares Air Canada’s fourth quarter 2014 and fourth quarter 2013 CASM.
CENTS PER ASM
FOURTH QUARTER CHANGE
2014 2013 CENTS %
Aircraft fuel 4.54 5.18 (0.64) (12.4)
Wages and salaries 2.74 2.68 0.06 2.2
Benefits 0.73 0.76 (0.03) (3.9)
Benefit plan amendments (1) -(0.51) 0.51 100.0
Capacity purchase agreements 1.70 1.74 (0.04) (2.3)
Airport and navigation fees 1.42 1.45 (0.03) (2.1)
Aircraft maintenance 1.16 0.99 0.17 17. 2
Sales and distribution costs 0.88 0.86 0.02 2.3
Depreciation, amortization and impairment 0.77 0.92 (0.15) (16.3)
Ground package costs 0.42 0.41 0.01 2.4
Aircraft rent 0.45 0.48 (0.03) (6.2)
Food, beverages and supplies 0.42 0.44 (0.02) (4.5)
Communications and information technology 0.30 0.28 0.02 7.1
Other 1.70 1.53 0.17 11.1
CASM 17.23 17.21 0.02 0.1
Remove:
Benefit plan amendments (1) -0.51 (0.51) (100.0)
CASM (excluding the impact of benefit
plan amendments) 17. 23 17.72 (0.49) (2.8)
1 In the fourth quarter of 2013, Air Canada recorded an operating expense reduction of $82 million related to amendments to defined benefit pension plans.
CASM 17.23 17.21 0.02 0.1
Remove:
Fuel expense, ground package costs at Air Canada
Vacations, benefit plan amendments and unusual items (1)(2) (5.15) (5.12) (0.03) (0.5)
Adjusted CASM (3) 12.08 12.09 (0.01) -
1 In the fourth quarter of 2013, Air Canada recorded an operating expense reduction of $82 million related to amendments to defined benefit pension plans.
2 In the fourth quarter of 2014, one-time payments totaling $30 million were made to ACPA members under a collective agreement concluded in October 2014.
3 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 9% FROM THE FOURTH QUARTER OF 2013
In the fourth quarter of 2014, operating expenses of $2,998 million increased $239 million or 9% from the
fourth quarter of 2013 on capacity growth of 8.5%. The unfavourable impact of a weaker Canadian dollar on
foreign currency denominated operating expenses (mainly U.S. dollars) in the fourth quarter of 2014, when
compared to the fourth quarter of 2013, increased operating expenses by approximately $89 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 the fourth quarter of 2014, Air Canada recorded
one-time payments totaling $30 million in Wages, salaries and benefits relating to its collective agreement
with ACPA (which was concluded in October 2014). In 2013, Air Canada recorded an operating expense
reduction of $82 million in Benefit plan amendments.