Jazz Air Income Fund
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JAZZ AIR INCOME FUND ANNUAL INFORMATION FORM March 28, 2008 i TABLE OF CONTENTS EXPLANATORY NOTES............................................................................................................................................1 CORPORATE STRUCTURE .......................................................................................................................................1 Name, Address and Incorporation.............................................................................................................................1 Intercorporate Relationship .......................................................................................................................................2 DEFINITION OF EBITDA...........................................................................................................................................2 GENERAL DEVELOPMENT OF THE BUSINESS....................................................................................................3 General......................................................................................................................................................................3 History of the Company ............................................................................................................................................4 THE JAZZ BUSINESS .................................................................................................................................................5 Overview...................................................................................................................................................................5 Integral Part of Air Canada's Strategy.......................................................................................................................6 Market Position in the Canadian Regional Airline Industry .....................................................................................6 Predictable and Stable Business Model.....................................................................................................................7 Cost Structure............................................................................................................................................................7 History of Operational Performance .........................................................................................................................8 Growth Strategy ........................................................................................................................................................8 Fleet...........................................................................................................................................................................9 Scope Clause ...........................................................................................................................................................11 Capacity Purchase Agreement with Air Canada .....................................................................................................11 Other Agreements with Air Canada ........................................................................................................................21 Passenger Services, Route Network and Hubs........................................................................................................22 Environmental Matters............................................................................................................................................23 Logos and Trademarks............................................................................................................................................23 Competition.............................................................................................................................................................23 Facilities ..................................................................................................................................................................23 Debt Financing........................................................................................................................................................24 REGULATORY ENVIRONMENT............................................................................................................................25 Domestic Services...................................................................................................................................................26 Transborder Services...............................................................................................................................................27 Charter Services ......................................................................................................................................................28 Official Languages Act ...........................................................................................................................................28 Security Initiatives...................................................................................................................................................28 Safety Initiatives......................................................................................................................................................29 Privacy ....................................................................................................................................................................30 DESCRIPTION OF THE FUND.................................................................................................................................30 General....................................................................................................................................................................30 Activities of the Fund..............................................................................................................................................30 Units........................................................................................................................................................................31 Issuance of Units .....................................................................................................................................................31 Trustees ...................................................................................................................................................................32 Officers....................................................................................................................................................................33 Cash Distributions...................................................................................................................................................33 Redemption at the Option of Unitholders ...............................................................................................................33 Repurchase of Units ................................................................................................................................................35 Meetings of Unitholders..........................................................................................................................................35 Voting Rights ..........................................................................................................................................................36 Limitation on Non-Resident Ownership .................................................................................................................37 Additional Limitations ............................................................................................................................................38 Amendments to the Fund Declaration of Trust .......................................................................................................38 Term of the Fund.....................................................................................................................................................38 Take-over Bids........................................................................................................................................................39 Exercise of Certain Voting Rights Attached to Securities of the Trust...................................................................39 Information and Reports..........................................................................................................................................40 Book-Entry System .................................................................................................................................................40 ii Conflicts of Interest Restrictions and Provisions ....................................................................................................40 Rights of Unitholders ..............................................................................................................................................40 DESCRIPTION OF THE TRUST...............................................................................................................................41 General....................................................................................................................................................................41 Restrictions on Trust's Trustees'