flyjazz.ca Jazz Air Income Fund Annual Meeting of Unitholders

Jazz Air Income Fund Annual Meeting of Unitholders
May 13, 2010 | Vancouver, British Columbia
flyjazz.ca
Jazz Air Income Fund
Annual Meeting of Unitholders
Richard McCoy
Chairman and Trustee
flyjazz.ca
Jazz Air Income Fund
Annual Meeting of Unitholders
Joseph D. Randell
President and Chief Executive Officer
flyjazz.ca
Jazz Air Income Fund
Annual Meeting of Unitholders
Barbara Snowdon
General Counsel and Corporate Secretary
flyjazz.ca
Jazz Air Income Fund
Annual Meeting of Unitholders
Allan Rowe
Chief Financial Officer
flyjazz.ca
Jazz Air Income Fund Annual Meeting of Unitholders
May 13, 2010 | Vancouver, British Columbia
flyjazz.ca
Disclaimer
CAUTION REGARDING FORWARD-LOOKING INFORMATION
Certain statements in this presentation may contain statements which are forward-looking statements. These forwardlooking statements are identified by the use of terms and phrases such as “anticipate”, “believe”, “could”, “estimate”,
“expect”, “intend”, “may”, “plan”, “predict”, “project”, “will”, “would”, and similar terms and phrases, including references
to assumptions. Such statements may involve but are not limited to comments with respect to strategies, expectations,
planned operations or future actions. Forward-looking statements relate to analyses and other information that are
based on forecasts of future results, estimates of amounts not yet determinable and other uncertain events. Forwardlooking statements, by their nature, are based on assumptions, including those described below, and are subject to
important risks and uncertainties. Any forecasts or forward-looking predictions or statements cannot be relied upon due
to, amongst other things, changing external events and general uncertainties of the business. Such statements involve
known and unknown risks, uncertainties and other factors that may cause the actual results, performance or
achievements to differ materially from those expressed in the forward-looking statements. Results indicated in forwardlooking statements may differ materially from actual results for a number of reasons, including without limitation, energy
prices, general industry, market and economic conditions, competition, insurance issues and costs, supply issues, war,
terrorist attacks, epidemic diseases, acts of God, changes in demand due to the seasonal nature of the business, the
ability to reduce operating costs and employee counts, employee relations, labour negotiations or disputes,
restructuring, pension issues, currency exchange and interest rates, changes in laws, adverse regulatory developments
or proceedings, pending and future litigation and actions by third parties, as well as the factors identified in the Risk
Factors section of Jazz Air Income Fund’s MD&A dated May 13, 2010. The forward-looking statements contained in
this discussion represent Jazz’s expectations as of March 31, 2010, and are subject to change after such
date. However, Jazz disclaims any intention or obligation to update or revise any forward-looking statements whether
as a result of new information, future events or otherwise, except as required under applicable securities regulations.
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Agenda
 2009 Performance Overview
Business Development Initiatives
Q1-2010 and Beyond
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Strong Operational Performance
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86.0%
99.2%
On-time
Performance
Flight
Completion
A leader in operational performance
Year 2009 – arrivals within 15 minutes
84.0%
77.3%
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78.6%
Jazz OTP versus US carriers
Year 2009 – arrivals within 15 minutes
Rank
1
2
3
4
5
6
7
8
9
10
Carrier
Hawaiian
Jazz
Southwest
Alaska
SkyWest
Frontier
United
US Airways
Mesa
Northwest
2009 OTP
91.76%
84.00%
82.47%
82.38%
81.70%
81.32%
80.54%
80.51%
80.03%
79.61%
Rank
11
12
13
14
15
16
17
18
19
20
Carrier
2009 OTP
Expressjet
78.22%
Continental
77.91%
Delta
77.84%
Jetblue
77.20%
American Eagle
76.53%
AirTran
75.99%
American
75.70%
Colgan
72.13%
Atlantic Southeast 70.93%
Comair
68.67%
US industry average – 78.73%
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Source: FlightStats.com
Strong financial results
Jazz Air Income Fund
Year ended December 31, 2009
($ million)
Operating Revenue
Performance Incentives
Year end 2009
1,473.9
19.0
Distributable Cash
139.3
EBITDA
159.0
Net Income
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92.6
CPA with Air Canada
 Re-negotiated rates for controllable costs
 Period of 2009 to 2011
 Achievable cost levels
 Amended CPA benefits both Jazz and Air Canada
 Five-year contract extension to 2020
 Confirmed target of 375,000 annual block hours
 Markup reduced from 16.72% to 12.50% on first 375,000 block
hours, and 5% markup on additional block hours
 Commitment to begin fleet renewal in 2011
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CPA provides for fleet renewal
 15 Bombardier Q400 NextGen to replace CRJ100/200
 Delivery will begin in May 2011
 Aircraft features:





LED lighting
New ceiling panels
Dished window sidewalls
Larger overhead bins
Active Noise and Vibration Suppression (ANVS) system
 Operating costs among the lowest of any regional aircraft
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Taking prudent steps
 Cash distributions
 Reduced to $0.60/unit annually
 Reflect amended CPA/term extension
 New level sustainable going forward
 Debenture transaction




Principal amount of $75 million
Over-allotment option of $11.25 million
Successfully completed on November 12, 2009
Funds further enhance balance sheet and liquidity position
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Committed to our people
 JazzNet intranet Message Centre
 Jazz Snapshot sessions
 Extensive review of payroll, pension and benefits functions
 Electronic pay stubs – environmentally friendly solution
 $13.8 million in profit sharing
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Labour agreements
 Ratified agreements to date
 CAW Maintenance – September 12, 2009
 CAW Airports – December 16, 2009
 CALDA – March 25, 2010
 Negotiations continue with other groups – crew
schedulers, flight attendants and pilots
 Goal
 Achieve mutually beneficial agreements that will enable Jazz
grow and diversify
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Executive appointments
 Colin Copp
appointed
Chief Administrative Officer
 Jolene Mahody
appointed
Chief Operating Officer
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Safety is our top priority
 Implemented programs and initiatives to remain among
the safest airlines in the world
 New process designed to help prevent potential future
occurrences
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Agenda
2009 Performance Overview
 Business Development Initiatives
Q1-2010 and Beyond
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Partnership with Thomas Cook







Fly from Canadian gateways to various sun destinations
Winter season (November through April)
Jazz will operate six B757-200s initially
$100 million additional annual revenues
Potential to grow contract to 11 aircraft
Term ending April 30, 2012 or April 30, 2015
Strong initiative begins diversification of Jazz Air LP
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Investment in Pluna S.A.





$15 million US investment - 25% indirect interest in Pluna
Uruguay’s flagship airline
Jazz and Pluna operate common aircraft types
Significant return on investment
Latin America is world’s 2nd fastest growing air travel market
 IATA projects 12.2% growth in 2010
 Strategy captures market potential in five South American
countries – encompassing more than 15 million people in 30
cities
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Agenda
2009 Performance Overview
Business Development Initiatives
 Q1-2010 and Beyond
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First quarter 2010 earnings
Jazz Air Income Fund
Period ended March 31, 2010
($ million)
Operating revenue
Q1 2010
355.4
Operating income
8.8
Net income
6.5
Distributable cash
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18.5
Looking ahead
 Corporate conversion
 Completion by year end
 Special meeting of unitholders targeted for September 2010
 Completion of labour negotiations
 Pilots
 Flight attendants
 Crew schedulers
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Driving force behind Jazz’s success
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Executive Team
Colin Copp
Chief Administrative Officer
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Executive Team
Jolene Mahody
Chief Operating Officer
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Executive Team
Rick Flynn
Vice President, Finance
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Executive Team
Steve Linthwaite
Vice President, Operations
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Executive Team
Richard Steer
Vice President, Maintenance and Engineering
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Executive Team
Scott Tapson
Vice President, Business Development
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Jazz Air Income Fund Annual Meeting of Unitholders
May 13, 2010 | Vancouver, British Columbia
flyjazz.ca