AIR TRANSPORT ASSOCIATION OF CANADA 2004IN SERVICE

AIR TRANSPORT ASSOCIATION OF CANADA
ANNUAL
REPORT
2004
IN SERVICE TO COMMERCIAL AVIATION
TABLE OF CONTENTS
MISSION STATEMENT AND OBJECTIVES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii
ATAC BOARD OF DIRECTORS 2003-2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
MESSAGE FROM THE CHAIR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
MESSAGE FROM THE PRESIDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ATAC COMMITTEES, SUBCOMMITTEES AND THEIR CHAIRPERSONS
[ATAC OFFICER RESPONSIBLE] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
MEMBERSHIP LIST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
HONORARY LIFE MEMBERS (REVISED OCTOBER 2004) . . . . . . . . . . . . . . . . . . . . . . . . 25
ATAC STAFF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
[ II ]
ATAC ANNUAL REPORT 2004
MISSION STATEMENT AND OBJECTIVES
MISSION: TO SUPPORT OUR MEMBERS IN THEIR PURSUIT OF A SAFE, WORLD-LEADING
AND COMPETITIVE CANADIAN AIR TRANSPORT INDUSTRY.
OBJECTIVES: Promote safe and reliable air transportation of people and goods to the benefit
of Canadian society.
•
•
•
•
•
•
•
Consult and cooperate with all Government and regulatory authorities seeking
the advancement or improvement of commercial aviation.
Promote and advocate for the commercial air transport industry.
Promote and support a regulatory framework that recognizes enterprise and
imagination in providing safe and competitive air transport services.
Provide excellent and cost-effective services to our members.
Promote professional operational standards and business practices by the membership.
Inform the public about the industry and its views in an open and factual manner.
Communicate matters of interest to our members in a timely and clear manner.
[ III ]
ATAC ANNUAL REPORT 2004
ATAC BOARD OF DIRECTORS 2003-2004
CHAIRMAN OF THE BOARD Joseph D. RANDELL, President & Chief Executive Officer,
Air Canada Jazz, Enfield, Nova Scotia
PRESIDENT & CHIEF EXECUTIVE OFFICER: J. Clifford MACKAY, President & Chief Executive Officer,
ATAC, Ottawa, Ontario
1ST VICE CHAIRMAN: Bob DAVIS, President,
First Air, Carp, Ontario
2ND VICE CHAIRMAN: Don BELL, Senior Vice President,
Customer Service & Co-Chief Operating Officer,
WestJet, Calgary, Alberta
HONORARY TREASURER: Duncan DEE, Senior Vice President, Corporate Affairs,
Air Canada, Ottawa, Ontario
HONORARY SECRETARY: Barry LAPOINTE, President,
Kelowna Flightcraft Ltd., Kelowna, British Columbia
PAST CHAIRMAN OF THE BOARD: Russell PAYSON, Chairman and CEO,
Skyservice, Toronto, Ontario
[1]
DIRECTORS: Dennis COOPER, Chief Executive Officer,
Sky Wings Aviation Academy Ltd., Penhold, Alberta
Harvey J. FRIESEN, President,
Bearskin Airlines, Sioux Lookout, Ontario
Jim GLASS, Managing Partner,
Transwest Air, Prince Albert, Saskatchewan
Allen B. GRAHAM, President & CEO,
Air Transat, Mirabel, Quebec
Patricia KENNEDY, Chief Operating Officer,
Pacific Flying Club, Delta, British Columbia
D. Bruce MACDOUGALL
Paterson, MacDougall, Toronto, Ontario
Paul MULROONEY, President,
Air Georgian Limited, Mississauga, Ontario
Dan MUNRO, President,
National Helicopters Inc., Kleinburg, Ontario
Rob REID, Senior Vice President, Operations,
Air Canada, Toronto, Ontario
John M. SCHOLEFIELD, President,
Laurentide Aviation, Les Cedres, Quebec
Rick WYNOTT, Director of Flight Operations,
Brampton Flying Club, Cheltenham, Ontario
* Mark Hill Resigned from the Board May 2004
[2]
ATAC ANNUAL REPORT 2004
MESSAGE FROM THE CHAIR
JOSEPH D. RANDELL
President & CEO
Air Canada Jazz
This is ATAC’s seventieth year
as the voice of commercial
aviation in Canada. Over the
decades, our industry has
reinvented itself many times.
There have been good years,
and their have been difficult
years. And through it all, ATAC has been there to
look out for our interests and to provide a common
voice for our industry.
Being the Chairman of the Air Transport Association
of Canada is always a great honour, but when you
also have the opportunity to hold the position in a
year when more things go right than go wrong, it is
also a pleasure.
Individually, we may compete fiercely with each
other, but as an Association we all share one goal…
to build a stronger air industry that will continue to
contribute to the growth and economic wellbeing of
Canadians for years to come.
During my term as Chairman, ATAC delivered a crucial victory on FAA Overflight Fees; achieved another
reduction in the air security charge; fought hard
against spiralling airport costs; and protected carriers from some potentially poor Federal legislation.
Financially, ATAC also ends the year in fairly good
shape, which is particularly impressive when you
consider how difficult the last few years have been
for our industry, and the fact that the Association has
not raised its membership fees for several years.
Over the next year, I fully expect the Association will
be busier than ever. In particular, I hope that
progress will be made in encouraging the government to develop a new aviation policy that will help
Canadian carriers stay competitive, serve Canadians
and make a profit.
On behalf of ATAC, I would like to thank the members Board of Directors and those who serve on the
various committees of the Association for their continuing commitment to the industry.
This year, the Air Transport Association of Canada once
again showed what can be accomplished when the
industry works together to solve common problems.
[3]
In particular, I want to express our sadness and
regret at the untimely passing of two Board
Colleagues, Rick Wynott and John Scholefield. Both
were great contributors and supporters of our
industry and they and their contributions will be
sorely missed.
I also want to thank ATAC’s staff. Without all of you,
our industry’s voice would not be heard by those
who need to hear it.
Seventy years after this association was founded,
ATAC still serves an important purpose. I am confident that over the next year, the Association will
once again show why we all benefit from its continued existence.
Good luck to us all.
Joseph Randell
[4]
ATAC ANNUAL REPORT 2004
MESSAGE FROM THE PRESIDENT
J. CLIFFORD MACKAY
President & Chief Executive Officer
Air Transport Association of Canada
This year, I want to bring back
some words that haven’t
been used in ATAC Reports
for many years. Words like
strength, stability, and one
we haven’t heard in a particularly long time… optimism.
As an industry, we actually have quite a bit to be
optimistic about.
Together, we have persisted through some exceptionally dark and difficult years. We have endured
war and disease. We have weathered runaway costs
and economic downturn. We have challenged and
been challenged by our business models. And
through it all we have survived.
One of the things that has made our survival particularly gratifying is that we managed it ourselves;
using the resources, experience and survival skills of
our industry. We were not bailed out, we confronted
our own problems and we solved them ourselves.
I would like to take a moment to reflect on some of
the successes of the past year.
STABLE AND GROWING
This has been particularly notable year for many of
our members. At every level of the industry and every
region of the country, operators large and small are
recording growing business activities.
As you know, this fall Air Canada finally emerged
from its restructuring process under the Companies’
Creditor Arrangement Act (CCAA). The protection
extended to Air Canada under the Act allowed the
company to take some dramatic steps to improve its
financial stability and reduce its cost per air seat mile.
In the last year, the low cost sector of our industry
has also come into its own. Low cost carriers now
control about 40% of the domestic air market and
are still growing.
[5]
The signs are all positive. CanJet is expanding its
fleet and adding routes. Jetsgo has doubled its size
in the past twelve months and is still growing. And
WestJet has shown the world how you can operate
a low cost airline, profitably, using a business model
that is uniquely Canadian.
In the Charter end of the business, Air Transat has
just had the best year of its corporate life.
All of this has been good news for air travellers. The
level of competition in our industry is higher that it
has ever been. At the same time, passengers are
paying less for their tickets than ever before. With
lower ASM costs, carriers are still finding ways to
make money.
As a result, ATAC member airlines received refunds
totaling about $33 million on fees already paid.
FEDERAL AIR POLICY WINS
At home, ATAC pressed for an ultimately got a
second reduction in the Air Travellers Security Charge
as part of the 2004 Federal Budget. This latest
reduction puts Canadian air security fees in line with
those in most other countries.
While this is a victory of sorts for the industry, air
transport is still the only transport industry where
the users are expected to cover the costs of added
security. We will continue working to level the
playing field.
The Association also fought hard against two poorlyconceived pieces of Federal legislation; the amendments to the Canadian Transportation Act (C-26)
and the proposed Canada Airports Act (C-27). While
we expect replacement legislation to come back to
the House of Commons some time this winter, it
seems likely that the new legislation will be significantly better for the industry.
IMPROVING AIRPORT RELATIONS
We have seen significant improvements in ATAC’s
relationships with Canada’s airports this year. We are
continuing our efforts to further close the gaps.
ATAC ACHIEVEMENTS
Like the industry, ATAC has also faced some hard
financial realities in the past two years. Yet even with
our limited resources, our staff still managed to
deliver some important wins for the members.
VICTORY ON FAA OVERFLIGHT FEES
To begin, ATAC successfully concluded a lawsuit we
brought on behalf of our members against the unfair
‘overflight fees’ charged by the Federal Aviation
Administration on all aircraft passing over US territory.
ATAC argued that American administrative law had
not been followed in imposing the fee. This position
was accepted by the US Court of Appeals and survived two further legal appeals by the FAA.
[6]
Ottawa’s Macdonald-Cartier International Airport,
for example, has invited ATAC to nominate a person
to sit on the airport’s Board of Directors. Policy differences between ATAC and the Canadian Airports
Council are also starting to minimize, and we are
seeing new opportunities for airports and air carriers
to work together on issues of common interest.
PEARSON AIRPORT COSTS
ATAC’s relations with Pearson International Airport
also have the opportunity to improve with the appointment of John Kaldeway as the airport’s new President.
ATAC ANNUAL REPORT 2004
Reducing the excessive costs of flying in and out of
Pearson Airport has been a particular priority for
ATAC and our friends at IATA this year. We believe
our success in raising the profile of Pearson’s high
operating costs and out-of-control fees are starting
to have an effect on media and political leaders.
In the coming year we hope to see legislation tabled
in Parliament that would amend the Airports Act to
make airports more accountable to their users. ATAC
also believes that our longstanding concerns about
the onerous and unsustainable burden of Crown
rent are finally starting to through.
new member service today – the Industry Observer
Program. The program is designed to make expert
advice available to members following an accident
or incident. If you are interested details are available
at the registration desk.
ATAC continues to take a lead role as one of the key
promoters of Canadian aviation to the world. For
example, ATAC’s own magazine, Flightplan – in
which many of our members advertise – is now
available in Canadian consulates around the world.
As a result, Canada has become more firmly established as one of the world’s leading centres for flight
training and skills enhancement.
QUIET VICTORIES
ATAC has also logged many less high-profile accomplishments over the year.
The Association has made progress in improving the
implementation of safety management systems
(SMS); we have improved training standards; dealt
with accessibility issues; and represented industry
positions regarding engine emissions as they relate
to the Kyoto Protocol. As always, ATAC also has
worked with government officials to clarify and
improve a variety of Federal regulations such as ELTs,
TAWs, 1:40/1:50 flight attendant ratios and work on
weights and measures.
A particularly satisfying win is the amendment to
remove the “spin requirements” from the pilot training
standard as many of you know, John Scholefield championed this issue. In addition, we are announcing a
This also is the seventh straight year that ATAC has
not raised annual fees for our members. Our fees, it
is worth remembering, have remained steady even
through the bankruptcies of three of our largest
members; the tragedy of 9-11; the invasion of
Afghanistan; the war in Iraq; and the SARS crisis.
What other industry has faced challenges of similar
scale? What other industry association, even in
normal times, has accomplished as much as ATAC
without raising membership fees?
NEW HORIZONS AND NEW CHALLENGES
We can’t afford to dwell on our accomplishments for
too long, though, because while Canada’s air
industry is relatively calm at the moment there are
still plenty of storms elsewhere in the aviation world.
[7]
Several major U.S. and Europe carriers are still in the
middle of their own financial crises. Continuing political uncertainty in the Middle East also has brought
record high fuel prices with the potential to cut the
legs out from under even the strongest carriers.
Carriers face fresh challenges at home, too. We have
a new Minority Federal Government, with a new
Minister, new Transport Critics, and a new
Parliamentary Committee. Empowered backbenchers
can be useful allies for our industry, but the political
situation is also a lot more volatile.
SOME FINAL THOUGHTS
So, all in all, this has been a good year for ATAC and
our members. This optimism, of course, is tempered
with some sadness because this year we also have
lost some friends and parted ways with others. ATAC
lost two of the most committed members of our
Board of Directors; Rick Wynott, and John
Scholefield to tragic accidents. Mark Hill of WestJet
also left our Board.
Our staff saw changes too. I would like to send a
special goodbye to Fred Jones, who has left ATAC to
take up new responsibilities at the Canadian
Airports Council. And extend a big welcome to Andy
Vasarins, who has joined the team as Vice-President,
Flight Operations, after a distinguished career at
NAV CANADA.
I also want to thank the staff for another excellent,
if tiring, year.
One final, and particularly heartfelt, thank you to the
Board of Directors and our Chairman, who provided
excellent leadership and support throughout the year.
THE ROUTE AHEAD
The accomplishments of the Association and our
members this year will create many new opportunities for our industry to grow in the future. While
many important advances have been made in the
areas of industry economics, cost mitigation and airport relations, a lot more work still needs to be done.
ATAC believes the time has finally come for the
Federal Government to put airline policy on an
equally stable and promising footing as the industry.
Achieving a policy that actually supports and
encourages aviation will be one of our key policy
goals for the coming year.
[8]
It is my hope that next year will be as fruitful and
refreshing as the past year.
Thank you again.
J. Clifford Mackay
President & Chief Executive Officer
Air Transport Association of Canada
ATAC ANNUAL REPORT 2004
ATAC COMMITTEES, SUBCOMMITTEES
AND
THEIR CHAIRPERSONS
[ATAC officer responsible]
ACCESSIBLE TRANSPORTATION
Appointment Pending
[Warren Everson]
ENGINEERING AND MAINTENANCE
Vic Lukawitski, WestJet
[Les Aalders]
AEROMEDICAL ADVISORY
Appointment Pending
[Andy Vasarins]
ENGINEERING AND MAINTENANCE
STEERING COMMITTEE
Vic Lukawitski, WestJet
[Les Aalders]
AFFILIATE MEMBERS' LIAISON
Glenn Priestley, ATAC
[Glenn Priestley]
AIRCRAFT FUEL HANDLING
Appointment Pending.
[Glenn Priestley]
AIRSIDE SAFETY
Glenn Priestley, ATAC
[Glenn Priestley]
CARGO
John MacKenzie, All Canada Express
[Warren Everson]
DANGEROUS GOODS
Dave Evans, Purolator
[Glenn Priestley]
* CAR 406/703 OPERATORS ENGINEERING
AND MAINTENANCE
Les Aalders, ATAC
[Les Aalders]
* ENGINEERING
Les Aalders, ATAC
[Les Aalders]
* MAINTENANCE & QUALITY ASSURANCE
Les Aalders, ATAC
[Les Aalders]
ENVIRONMENTAL AFFAIRS
Don McLeay, Air Canada
[Les Aalders]
FACILITATION
Warren Everson, ATAC
[Warren Everson]
[9]
FIXED-WING CHARTER
Bob Lamoureux, Alta Flights (Charters) Inc.
[Glenn Priestley]
FLIGHT OPERATIONS
Tim Morgan, WestJet
[Andy Vasarins]
* CABIN OPERATIONS
Rhonda Bishop, Air Canada Jazz
[Andy Vasarins]
FLIGHT TRAINING
Dennis Cooper, Skywings Aviation Academy Ltd.
[Glenn Priestley]
GROUND SAFETY
Appointment Pending
[Glenn Priestley]
LOCAL SERVICES OPERATORS GROUP
Dennis Cooper, Skywings Aviation Academy Ltd.
[Glenn Priestley]
MAINTENANCE, REPAIR & OVERHAUL
Derek Nice, ExelTech
[Les Aalders]
SAFETY ADVISORY
Greg Joseph, Air Canada Jazz
[Andy Vasarins]
SECURITY
Carol Clark, First Air
[Michael Skrobica]
HELICOPTER
Dan Munro, National Helicopters Inc.
[Andy Vasarins]
TAX
Martina Krummen, Air Canada
[Warren Everson]
INDUSTRY & MONETARY AFFAIRS
Dave Robinson, Air Canada
[Michael Skrobica]
TRAFFIC CONFERENCE
Appointment Pending
[Michael Skrobica]
LABOUR LEGISLATION
Appointment Pending
[Warren Everson]
* EMPLOYMENT EQUITY
Appointment Pending
[Warren Everson]
* OCCUPATIONAL SAFETY & HEALTH
Appointment Pending
[Glenn Priestley]
[ 10 ]
LEGAL
George Petsikas, Air Transat
[Warren Everson]
* Subcommittees
October 15, 2004
PricewaterhouseCoopers LLP
Chartered Accountants
99 Bank Street, Suite 700
Ottawa, Ontario
Canada K1P 1K6
Telephone +1 (613) 237 3702
Facsimile +1 (613) 237 3963
Auditors’ Report
To the Directors of
Air Transport Association of Canada
We have audited the statement of financial position of Air Transport Association of Canada as at
September 30, 2004 and the statements of changes in net assets, operations and cash flows for the year
then ended. These financial statements are the responsibility of the Association’s management. Our
responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with Canadian generally accepted auditing standards. Those
standards require that we plan and perform an audit to obtain reasonable assurance whether the
financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.
In our opinion, these financial statements present fairly, in all material respects, the financial position
of the Association as at September 30, 2004 and the results of its operations and its cash flows for the
year then ended in accordance with Canadian generally accepted accounting principles. As required by
the Canada Corporations Act, we report that, in our opinion, these principles have been applied on a
basis consistent with that of the preceding year.
Chartered Accountants
PricewaterhouseCoopers refers to the Canadian firm of PricewaterhouseCoopers LLP and the other member firms of PricewaterhouseCoopers
International Limited, each of which is a separate and independent legal entity.
[ 11 ]
AIR TRANSPORT ASSOCIATION OF CANADA, FINANCIAL STATEMENTS, For the year ended September 30, 2004
STATEMENT OF
2004
2003
$
$
ASSETS
FINANCIAL POSITION
For the year ended
September 30, 2004
CURRENT ASSETS
Cash and cash equivalents
Short-term investments
Accounts receivable
Deposits and prepaid expenses
Capital assets (note 3)
Deferred costs
868,008
332,603
5,500
513,385
356,346
511,489
29,357
25,678
1,259,211
1,383,155
95,232
135,721
–
12,488
522,306
–
1,876,749
1,531,364
Accounts payable and accrued liabilities
589,519
610,563
Fees received in advance
309,573
112,752
9,880
8,872
908,972
732,187
Investments
LIABILITIES AND NET ASSETS
CURRENT LIABILITIES
Current portion of capital lease obligation
CAPITAL LEASE OBLIGATION (note 4)
23,253
33,135
DEFERRED LEASE INDUCEMENT
30,333
43,333
PENSION LIABILITY (note 5)
194,600
145,207
1,157,158
953,862
357,492
227,880
62,099
93,714
NET ASSETS
Unrestricted
Invested in capital assets
Internally restricted for special projects (note 10)
[ 12 ]
300,000
255,908
719,591
577,502
1,876,749
1,531,364
ATAC ANNUAL REPORT 2004
Internally
restricted for
STATEMENT
OF CHANGES IN
NET ASSETS
For the year ended
September 30, 2004
OF OPERATIONS
For the year ended
September 30, 2004
special projects
Total
Total
capital assets
(note 10)
2004
2003
$
$
$
$
$
BALANCE – BEGINNING OF YEAR
227,880
93,714
255,908
577,502
574,426
Excess (deficiency) of revenue over expenses for the year
186,965
(44,876)
–
142,089
3,076
Transfer
(44,092)
–
44,092
–
–
(4,387)
4,387
–
–
–
Investment in capital assets
Repayment of capital lease obligation
(8,874)
8,874
–
–
–
357,492
62,099
300,000
719,591
577,502
2004
2003
$
$
1,151,495
1,148,080
120,899
142,557
Fees and other
326,722
314,269
Special projects
254,132
597,712
1,853,248
2,202,618
28,250
27,551
Bad debts (recovery)
(92,093)
139,000
General and other
133,685
130,182
Occupancy cost
124,976
117,868
Professional fees
32,711
45,566
BALANCE – END OF YEAR
STATEMENT
Invested in
Unrestricted
REVENUE
Membership fees
Association meetings, net (note 7)
EXPENSES
Administration and office
Salaries and benefits
Special projects
1,078,888
959,605
255,907
607,307
Telecommunications
44,697
66,168
Travel
59,262
52,245
Amortization of capital assets
EXCESS OF REVENUE OVER EXPENSES FOR THE YEAR
44,876
54,050
1,711,159
2,199,542
142,089
3,076
[ 13 ]
AIR TRANSPORT ASSOCIATION OF CANADA, FINANCIAL STATEMENTS, For the year ended September 30, 2004
STATEMENT
2004
2003
$
$
142,089
3,076
44,876
54,050
CASH FLOWS FROM (USED IN)
OF CASH FLOWS
For the year ended
September 30, 2004
OPERATING ACTIVITIES
Excess of revenue over expenses for the year
Items not involving cash –
Amortization of capital assets
Amortization of deferred costs
12,488
12,489
Amortization of deferred lease inducement
(13,000)
(13,000)
Gain on disposal of equipment under capital lease
Difference between pension expense and amount funded
Net change in non-cash working capital items
–
(4,108)
49,393
(8,793)
327,240
150,272
563,086
193,986
INVESTING ACTIVITIES
Purchase of capital assets
Purchase of short term investments
(4,387)
(22,664)
–
(298,939)
Redemption of short term investments
507,885
349,734
Purchase of long term investments
(522,306)
–
(18,808)
28,131
(8,873)
(9,329)
NET CHANGE IN CASH FOR THE YEAR
535,405
212,788
CASH AND CASH EQUIVALENTS – BEGINNING OF YEAR
332,603
119,815
CASH AND CASH EQUIVALENTS – END OF YEAR
868,008
332,603
155,143
(210,939)
(3,680)
(6,371)
Accounts payable and accrued liabilities
(21,044)
339,373
Fees received in advance
196,821
28,209
327,240
150,272
Acquisition of equipment under capital lease
–
(51,336)
Increase in capital lease obligation
–
51,336
Disposal of equipment under capital lease
–
20,577
Decrease in capital lease obligation
–
(20,577)
FINANCING ACTIVITY
Repayment of capital lease obligation
NET CHANGE IN NON-CASH WORKING CAPITAL ITEMS:
Accounts receivable
Deposits and prepaid expenses
SUPPLEMENTAL INFORMATION
[ 14 ]
ATAC ANNUAL REPORT 2004
NOTES TO
FINANCIAL
STATEMENTS
1 ORGANIZATION
Air Transport Association of Canada is incorporated without share capital under Part II of the Canada Corporations Act. Under subsection 149(1)(l) of the
Income Tax Act, the Association is a non-profit organization and is not subject to income taxes.
For the year ended
September 30, 2004
The purpose of the Association is to act as the national service organization for Canada’s commercial air transport industry.
2 SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial
statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates.
CASH EQUIVALENTS
Deposits with financial institutions that can be withdrawn without prior notice or penalty and short-term deposits with an original term to maturity of
ninety days or less are considered cash equivalents as they are highly liquid, readily convertible to cash and not subject to significant changes in value.
SHORT-TERM INVESTMENTS
Short-term investments are carried at the lower of cost plus accrued interest and fair value.
CAPITAL ASSETS
Capital assets are recorded at cost and are amortized, over their estimated useful lives, on a straight-line basis using the following annual rates:
Office equipment
10%
Computer equipment
20%
Leasehold improvements
10%
Software
33%
Marketing equipment
33%
Equipment under capital lease
20%
DEFERRED COSTS
Air Transport Association of Canada Notes to Financial Statements September 30, 2004 (7) Deferred costs comprise expenses incurred in the successful
arrangement of a Memorandum of Agreement on Airport Improvement Fees that was executed between airlines, airports and the Association. The
Agreement provides for an administrative fee to be paid to the Association. The deferred costs are being amortized over five years.
[ 15 ]
AIR TRANSPORT ASSOCIATION OF CANADA, FINANCIAL STATEMENTS, For the year ended September 30, 2004
NOTES TO
FINANCIAL
STATEMENTS
DEFERRED LEASE INDUCEMENTS
Lease inducements are deferred and then amortized on a straight-line basis over the term of the lease, which is the ten years beginning February 1, 1997.
Amortization of the deferred lease inducements is reflected in the statement of operations and reduces occupancy cost.
For the year ended
September 30, 2004
PENSION PLAN
The Association accrues its obligations under an employee benefit plan and the related costs, net of changes in plan assets, as follows:
• The cost of pensions and other retirement benefits earned by employees is actuarially determined using the projected benefit method pro rated on
service and management’s best estimate of expected plan investment performance, salary escalation, retirement ages of employees and expected
health care costs.
• For the purpose of calculating the expected return on plan assets, those assets are valued at fair value.
• The net transitional asset is amortized over the average remaining service period of active employees covered by the pension plan, which is 12 years.
The amount contributed to the plan by the Association is established using accepted actuarial procedures. The cumulative difference between the amount
expensed and the amount contributed by the Association is recorded as a deferred charge or credit.
REVENUE RECOGNITION
The Association follows the deferral method of accounting for revenue.
Membership fees are recognized as revenue in the period to which they relate. Revenue from Association meetings and programs is recognized as revenue
when the services are provided.
Revenue from special assessments is recognized in the year in which the related expenses are incurred.
[ 16 ]
ATAC ANNUAL REPORT 2004
NOTES TO
3 CAPITAL ASSETS
FINANCIAL
2004
2003
STATEMENTS
For the year ended
Accumulated
September 30, 2004
Cost
amorization
Net
Net
$
$
$
$
Office equipment
124,532
98,594
25,938
30,839
Computer equipment
161,805
159,586
2,219
9,898
Leasehold improvements
127,070
97,414
29,656
42,363
Software
40,485
39,571
914
2,145
Marketing equipment
12,396
10,330
2,066
6,198
Equipment under capital lease
49,198
14,759
34,439
44,278
515,486
420,254
95,232
135,721
4 CAPITAL LEASE OBLIGATION
Future minimum lease payments under a capital lease for equipment are as follows:
$
Year ending September 30, 2005
13,097
2006
13,097
2007
13,096
39,290
Amount representing interest
(6,157)
Balance of obligation at September 30,2004
33,133
Current portion of capital lease obligation
9,880
23,253
The imputed interest rate with respect to the capital lease obligation is approximately 10.9%.
[ 17 ]
AIR TRANSPORT ASSOCIATION OF CANADA, FINANCIAL STATEMENTS, For the year ended September 30, 2004
NOTES TO
5 PENSION PLAN AND OTHER TERMINATION ARRANGEMENTS
FINANCIAL
STATEMENTS
For the year ended
September 30, 2004
PENSION PLAN
The Association provides retirement benefits for its employees under a defined benefit pension plan. The plan provided benefits that are based on a combination of years of service and a percentage of the participant’s plan earnings. The cumulative difference between the provision for pension and costs and
funding contributions is shown as a deferred charge on the balance sheet.
Information about the Association’s defined benefit plan as at September 30, 2004, based on an extrapolation of a valuation dated
October 1, 2001, is as follows:
2004
$
2003
$
Accrued benefit obligation
(1,401,800)
(1,391,200)
Fair value of plan assets
1,016,500
1,083,600
(385,300)
(307,600)
2004
2003
Plan deficit
The significant actuarial assumptions adopted in measuring the Association’s accrued benefit obligation are as follows:
Expected long-term rate of return on plan assets
7.00%
7.00%
Discount rate
6.00%
6.75%
Rate of compensation increase
4.00%
4.00%
2004
2003
The Association’s pension expense for the year is as follows:
Accrual for service
$
$
106,200
59,100
Interest on benefit obligation
84,400
76,500
Expected return on plan assets
(72,400)
(72,100)
Net actuarial gain (loss)
10,400
Amortization of transitional asset
(11,400)
(11,400)
–
Pension expense
117,200
52,100
Less: employee contributions
28,200
26,700
Employer pension expense
89,000
25,400
OTHER TERMINATION ARRANGEMENTS
The Association provides various benefits for employees with 5 or more years of continuous service. These benefits are paid on retirement or resignation. The value
of these benefits which have been accrued and are included in accounts payable and accrued liabilities as at September 30, 2004 is $29,364 (2003 – $30,551).
[ 18 ]
ATAC ANNUAL REPORT 2004
NOTES TO
FINANCIAL
6 SPECIAL PROGRAMS
The Association manages a number of special programs that will benefit the industry. Total receipts and disbursements of these programs are as follows:
STATEMENTS
For the year ended
2004
2003
September 30, 2004
$
$
1,667,345
1,400,522
–
39,079
RECEIPTS
Air Cadets Training Program
Traffic Conference
Canadian Aviation Security Awareness Committee
–
4,650
1,667,345
1,444,251
1,651,745
1,385,147
2,624
28,971
DISBURSEMENTS
Air Cadets Training Program
Traffic Conference
Canadian Aviation Security Awareness Committee
48,744
11,921
1,703,113
1,426,039
The Association administers training programs for training air cadets. The Association contracts for the services of flight training schools and receives reimbursement for the costs of the air cadet training from the Department of National Defence. The Association received $15,600 (2003 – $15,385) in fees for
the administration of the programs.
The Traffic Conference is a separate Committee within the Association that develops interline rules for connecting domestic flights. The Association contracts
out the administration of these rules. The Association charges members to cover the cost of administering the interline rules.
The Canadian Aviation Security Awareness Committee was formed in 1998 to ensure and promote proactive security measures at airports in areas such as
security pass usage and access to secure areas in airports. A Committee, made up of key players in the industry, was formed to ensure that the program
goals were met. The Association acts as an administrator of the program by collecting fees and disbursing these funds in accordance with the Committee
approved expenditures.
Receipts and disbursements of these programs are not included in the statement of operations of the Association. The excess of receipts over disbursements
for the year is included in accounts payable as excess contributions must be returned to the funding source. At September 30, 2004, there is a balance of
$31,245 (2003 – $33,182) included in accounts payable for these special programs.
[ 19 ]
AIR TRANSPORT ASSOCIATION OF CANADA, FINANCIAL STATEMENTS, For the year ended September 30, 2004
NOTES TO
FINANCIAL
7 ASSOCIATION MEETINGS
During the year, the Association held an annual general meeting and a spring reception. Gross revenue and expenses related to these events were as follows:
STATEMENTS
For the year ended
2004
2003
September 30, 2004
$
$
Revenue
278,338
292,481
Expenses
157,439
149,924
120,899
142,557
8 CONTROLLED NOT-FOR-PROFIT CORPORATION
The Association is the sole member of the Air Transport Security Corporation (“ATSC”), a company incorporated without share capital March 3, 1997
under Part II of the Canada Corporations Act. ATSC has assumed ownership, operates and manages certain security related equipment situated at
Canadian airports.
Following the events of September 11, 2001, the Canadian government announced its intention to resume the task of owning, operating and managing
the security-related equipment at Canadian airports. As a result, the government finalized an agreement to acquire the net assets of ATSC and assume its
operations on April 2, 2002 at which point ATSC ceased active operations.
Under the terms of the agreement, ATSC fully recovered its recorded net assets as compensation from the Canadian government, including estimated
wind-up expenses which were accrued to December 31, 2002.
In January 2003, ATSC refunded approximately $1,200,000 of user charges, which were included in accrued liabilities at December 31, 2002. ATSC has
not yet decided the final use or disposition of the remaining net assets subsequent to the wind-up of its airport security operations.
ATSC issues separate, audited financial statements and their results are not consolidated with the Association’s. Selected financial information as reported
by ATSC for its last two years is as follows:
YEAR ENDED
YEAR ENDED
DECEMBER 31,
DECEMBER 31,
2003 $
2002 $
RESULTS OF OPERATIONS
[ 20 ]
Total revenue
99,135
955,140
Total expenses
129,742
2,161,634
Deficiency of revenue over expenses for the year
(30,607)
(1,206,494)
ATAC ANNUAL REPORT 2004
NOTES TO
YEAR ENDED
YEAR ENDED
FINANCIAL
DECEMBER 31,
DECEMBER 31,
STATEMENTS
2003 $
2002 $
102,860
1,362,729
Total liabilities
25,314
1,254,576
Net assets
77,546
108,153
For the year ended
September 30, 2004
FINANCIAL POSITION
Total assets
YEAR ENDED
YEAR ENDED
DECEMBER 31,
DECEMBER 31,
2003 $
2002 $
CASH FLOWS
Cash flows from operations
Cash flows used in investing and financing activities
Net change in cash for the year
(30,607)
96,767
–
930,385
(30,607)
1,027,152
During the year, ATSC reimbursed $nil (2003 – $80,474) to the Association for aviation security related expenses incurred by the Association.
9 COMMITMENTS
The Association leases premises under a long-term operating lease which expires in 2007. The future minimum lease payments are approximately as follows:
Year ending September 30, 2005
55,000
2006
55,000
2007
18,000
10 INTERNALLY RESTRICTED ASSETS
Air Transport Association of Canada Notes to Financial Statements September 30, 2004 (13) A portion of net assets is restricted for special projects critical to the interest of the Association’s members but not part of the ongoing functions of the Association. The balance is adjusted annually to a targeted
amount determined by the Association’s Board of Directors.
11 FINANCIAL INSTRUMENTS
INVESTMENTS
The Association holds two fixed income securities yielding 3.58% and 4.39% per annum maturing in December 2007 and March 2009.
[ 21 ]
MEMBERSHIP LIST
OPERATORS
Aeroclub de Montreal
Campbell River Flight Training
Gateway Helicopters Ltd.
Air Canada
Canadian Flight Centre
General Aviation Inc.O/A Flying Colors Pilot
Air Canada Jazz
Canadian Flyers International
Air Creebec Inc.
Canjet Airlines a Division
Georgian Bay Airways
Air Georgian Limited
Cargojet Airways Ltd.
Great International Flight Training
Air NorTerra Inc. dba Canadian North
Centre Quebecois de Formation Aeronautique-
Great Northern Flying School
Air Tindi
[ 22 ]
CEGEP de Chicoutimi
Training
Greenwood Flight Centre
Air Transat
Cloud Air Service Ltd.
Grimsby Aviation
Airco Aircraft Charters Ltd.
Coastal Pacific Aviation
Hamilton Flying Club
Algonquin Flight Centre Inc.
Confederation College
Harv's Air Service
AllCanada Express Limited
Cooking Lake Aviation Academy Inc.
Hawkair Aviation Services Ltd.
Alta Flights (Charters) Inc.
Corporate Express Airlines
Helicopter Training Corporation
Aviation 5-50
Courtenay Flight Center, Inc.
Island Air Flight School and Charters Inc.
Aviation Commercial Aviation
Debert Flight Centre
Jackson Air Services Ltd.
Aviation International (Canada) Inc.
Durham Flight Centre Inc.
Jetsgo
Bar XH Air Inc/Alberta Citylink
Eagle Flight Centre
Juan Air (1979) Ltd.
Bearskin Airlines
Edge Air
Kawartha Lakes Flight Centre Ltd.
Brampton Flying Club
Edmonton Flying Club
Keewatin Air Limited
Brandon Flying Club
Empire Aviation
Kelowna Flightcraft Ltd.
Buffalo Airways Ltd.
First Air
Kingston Flying Club
Calgary Flight Training Centre
First Nations Technical Institute
KnightHawk Air Express, 2734141 Canada Inc.
Calgary Flying Club
Forest Protection Limited
Laurentide Aviation
Calm Air International Ltd.
Gander Flight Training
Millennium Aviation Ltd.
ATAC ANNUAL REPORT 2004
Mitchinson Flying Service Limited
Moncton Flight College Inc.
Selkirk College Professional Aviation
Department
WestJet
Windsor Flying Club
Morgan Air Services Co. Ltd.
Seneca College of Applied Arts & Technology
Winnipeg Flying Club
Morningstar Air Express Inc.
Sharp Wings
Mount Royal College (Aviation Program)
Sky Wings Aviation Academy Ltd.
ASSOCIATES
National Flyers Academy
Skylink Express Inc.
A&VM Business Development Ltd.
National Helicopters Inc.
Skyservice
Aeroports de Montreal
Niagara Helicopters Limited
Sontair Limited
Aeroterm Management Inc.
North Cariboo Flying Service Ltd. dba North
Southern Skies Aviation
AIG Aviation (Canada), Inc.
Springdale Aviation Ltd.
Airbus
Ottawa Flying Club
St. Thomas Flight Centre
Alexander Holburn Beaudin & Lang
Pacific Coastal Airlines Limited
Sunwest Home Aviation Ltd.
Algonquin College
Pacific Flying Club
T-Byrd Flight Training
ALSIM Simulators
Pacific Professional Visual Flight Training Ltd.
The University of Western Ontario
America West Airlines, Inc.
Parallel Aviation Inc.
Toronto Airways Ltd.
American Airlines
Peninsulair Limited
Trans Capital Air Ltd.
Aon Group Limited Aviation
Cariboo Air
Aon Reed Stenhouse Inc. Aviation Specialty
Group
ATCO Frontec Corp.
ATR Marketing, Inc.
Avia Marketing Consultants Inc.
Aviation Publishers Co. Limited
Aviator Magazine.
BAE Systems Regional Aircraft
Boeing Aerospace Ltd.
Bombardier Aerospace Regional Aircraft
Borden Ladner Gervais LLP
British Airways
British Columbia Institute of Technology
Bryan & Company
C.T. AeroProjects Inc.
CAE Aviation Training
Calgary Airport Authority
Canadian Aviation Insurance Managers Ltd.
Cara Operations Limited
Cassels Brock & Blackwell LLP
Centennial College-Aerospace Dept.
Cessna Aircraft Company
Prince Edward Air Ltd.
Trans North Helicopters
Chomicki Baril Mah LLP
Principal Air
Transwest Air
Clark+ Company, Barristers & Solicitors
Pro Aviation Inc.
Victoria Flying Club
Commuter Air Technology, Inc.
Pro Wings Aviation Ltd.
Vital Aviation Ltd.
Consolidated Aviation Services
Regina Flying Club
Voyageur Airways Ltd.
Continental Airlines
Rockcliffe Flying Club (1961)
Wasaya Airways Limited
Cryotech Deicing Technology
Sault College of Applied Arts & Technology
Waterloo Wellington Flight Centre
Delta Air Lines, Inc.
Scotia Flight Centre (1994) Incorporated
Welland Aero Center
Department of National Defence
[ 23 ]
Diamond Aircraft Industries Inc.
Paterson, MacDougall
Transport Canada
Donahue Wells
Plein Vol Magazine
United Airlines, Inc.
Dow Chemical Canada Inc.
PLH Aviation Services Inc.
United Parcel Service Canada Ltd.
Dulude, Taylor Inc.
Policyshop.com, Aeronavigatsia Consulting Inc.
Vaisala Inc.
Edmonton Regional Airports Authority
Pratt & Whitney Canada Corp.
Vista Cargo International Inc.
Edwards, Kenny & Bray
PricewaterhouseCoopers LLP
WestJet Pilots Association
Embraer Aircraft Corporation
PROAV International Aviation Services
Willis Global Aviation
Emond Harnden
Willis Lease Finance Corporation
PSA Insurance Services Ltd.
Wilson Aircraft, Div. of 913661
Fasken Martineau Dumoulin
Purolator Courier Ltd
Wings Magazine
Federal Express
Rapid Aircraft Repair Inc.
Winnipeg Airports Authority Inc.
Field Aviation West Ltd.
Rohmer & Fenn
Wood Group Turbopower, Inc.
Flightline Training Services
Saab Aircraft Leasing
FlightSafety Canada
Saskatchewan Institute of Applied Science and
Frasca International Inc.
Technology
AFFILIATES
Aviation Alberta
Fraser Milner Casgrain LLP
SkyQuest International LLC
British Columbia Aviation Council
GCAN Insurance Company
Smiths Detection – Toronto Ltd.
Canadian Business Aviation Association
GE Aircraft Engines
Spiegel Sohmer
Canadian Owners and Pilots Association
Georgian Benefits & Insurance Services
Standard Aero Limited
Federation of Canadian Municipalities
Georgian College
Stephenville Airport Corporation
Flight Safety Foundation
Global Aerospace Underwriting Managers
Sypher: Mueller International Inc.
Helicopter Association International
TBI Canada
Manitoba Aviation Council
GlobeGround North America, Inc.
Temple Scott Associates Inc.
National Air Transportation Association
Goodrich Corporation
The Right Approach Pilot Career Centre
Northern Air Transport Association
(Canada) Limited
Gowling Lafleur Henderson LLP
Hammond Aviation Limited
Harper Grey Easton
Hub International
Hungerford Tomyn Lawrenson and Nichols
Imperial Oil
InterVISTAS Consulting Inc.
ITA Software, Inc.
Lavery, de Billy
LPS Aviation Inc.
MacKenzie Fujisawa Barristers & Solicitors
Marsh Canada Limited
Mechtronix Systems Inc.
Montreal Aeroplus
N.W.O. Claims Services Inc.
NAV CANADA
Nobbs, Woods, Kavanagh & Bateman
Northrop Grumman Canada Corporation
Northwest Airlines, Inc.
Ogilvy Renault
Ontario Ministry of Transportation
Ottawa International Airport Authority
[ 24 ]
Corporation
ExelTech
Incorporated
The Van Horne Institute
Saskatchewan Aviation Council
ATAC ANNUAL REPORT 2004
HONORARY LIFE MEMBERS
1976 – D.N. (Don) Watson, Retired President,
Pacific Western Airlines
1977 – Al Smith, President,
Smith Airways Limited
1978 – Jack Fleming, President,
Dominion Pegasus Helicopters
1978 – Max Ward. President,
Wardair Canada (1975) Limited
1979 – H.D. (Don) Cameron,
Senior Vice President,
Administration & Public Affairs, CP Air
1980 – Jack Scholefield, President,
Laurentide Aviation Limited
1981 – Claude Taylor,
1984 – T.L. (Tom) Spalding,
(REVISED OCTOBER 2004)
1999 – Harry Steele,
Executive Vice President,
Chairman and Chief Executive Officer,
Wardair International Ltd.
Newfoundland Capital Corporation
1987 – Rhys Eyton,
Chairman & Chief Executive Officer,
Canadian Airlines International Ltd.
1988 – Pierre J. Jeanniot
President & Chief Executive Officer,
Air Canada
1988 – Stanley M. Deluce,
Chairman of the Board, Air Ontario
1989 – Donald S. McClure,
Moncton Flight Centre
1994 – Charles H. Simpson,
Limited
2000 – Barry Lapointe, President,
Kelowna Flightcraft Ltd.
2001 – Dennis Cooper, Chief Executive Officer
Sky Wings Aviation Academy
2001 – John W. Crichton,
President & Chief Executive Officer
NAV CANADA
2001 – Darrel G. Smith, Retired Vice President,
Airline Operations, AirBC
2002 – Douglas Port,
President & Chief Executive Officer,
Retired Executive Vice President,
Retired Senior Vice President,
Air Canada
Operations, Air Canada
Customer Service
1982 – Dave Jacox
Vice President, Pacific Western Airlines
1983 – Ian Gray
Retired President, CP Air
1997 – Jean-Jacques Bourgeault,
Air Canada
Senior Executive Vice-President,
Air Canada
1999 – C.A.L. (Arnold) Morberg, President,
Calm Air International Ltd.
[ 25 ]
ATAC STAFF
OFFICER
Les Aalders
VP – Engineering & Maintenance
EXT.
308
ASSISTANT
Pamela McGann
EXT.
317
Warren Everson
VP – Policy & Strategic Planning
314
Pamela McGann
317
Andy Vasarins
VP – Flight Operations
307
Jeanie Peppy
304
Cliff Mackay
President & CEO
313
Debbie Simpson
312
Glenn Priestley
VP – Fixed Wing Air Taxi and Flight Training
309
Jeanie Peppy
304
Michael Skrobica
VP – Industry Monetary Affairs
310
Pamela McGann
Linda Watson – Accountant
317
311
For more information on ATAC, or to speak with an ATAC officer, please contact:
AIR TRANSPORT ASSOCIATION OF CANADA
255 Albert Street, Suite 1100
Ottawa, Ontario K1P 6A9
Tel: (613) 233-7727
Fax: (613) 230-8648
Internet: http://www.atac.ca
Email: [email protected]
[ 26 ]