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Article Excerpt
OPERATOR: Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Jazz Air Income Fund Q4 and year-end results conference call. (Operator Instructions). I would like to remind everyone this conference call is being recorded on Wednesday, February 11th, 2009, at 9:00 am Eastern I'll now turn the call over to Nathalie Megann, Director, Corporate Communications and Investor Relations. Please go ahead.
NATHLIE MEGANN, DIRECTOR, CORPORATE COMMUNICATIONS, JAZZ INCOMD FUND: Thank you, operator. Hello, and thank you for joining us today for our fourth quarter and year end 2008 conference call and audio webcast. With me today from Jazz are Joe Randell, President and Chief Executive Officer; and Allan Rowe, Senior Vice President and Chief Financial Officer. We'll start by giving a brief overview of the results and then go on to questions from the analyst community.
Because some of the discussion in this call may be forward-looking, I'm going to read some standard cautionary language in that certain statements made in this call may be forward-looking and subject to important risks and uncertainties. cause some of the discussion in this call may be forward-looking, I'm going to read some standard cautionary language in that certain statements made in this call may be forward-looking and subject to important risks and uncertainties. Forward-looking statements relate to analysis and other information that are based on forecast of future results, estimates of amounts not yet determinable, and other certain events-- uncertain events. Forward-looking statements by their nature are based on assumptions and are subject to important risks and uncertainties. Any forecast or forward-looking predictions or statements cannot be relied upon due to, among 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 actual results, performance or achievements to differ materially from those expressed in forward-looking statements. Results indicated in forward looking statements may differ materially from actual results for a number of reasons, including those described or referenced in caution regarding forward-looking information found on page one of management's discussion and analysis of the results of operations and financial condition for the period ended December 31, 2008. Any forward-looking statements represent Jazz's current expectations and are subject to change. 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. I'll now turn the call over to Joe.
JOE RANDELL, CEO, JAZZ AIR INCOME FUND: Thank you Natalie, and good morning, everyone. My comments today will provide a high-level overview of the year, and Allan will discuss the financials for the fourth quarter. I characterize the year 2008 as a good year, with strong financial and operational results despite the challenges of the first half of the year, and from Mother Nature who continued to throw severe weather conditions at us in every quarter. Jazz is a great airline, and we have had many successes. Before I touch on some of the highlights from this year, I want to thank all Jazz employees for delivering a safe operation, and for maintaining the highest levels of professionalism. Our success is in large part due to the efforts of our employees. Truly, our people are our most important asset, and we invested significantly in improving employee engagement, and building our culture through communication. For example, we have established personalized email accounts for every front line employee and launched a new Company intranet which we call Jazznet to improve communications across the Company.
Our senior management team delivered a Company Snapshot presentation to over 300 in-house training classes, and reached over 70% of our employees through in-person discussion, and we made every employee with at least one year of service a unit holder of the Jazz Air Income Fund, thus increasing Jazz ownership within our employee group to over 90%. We delivered strong operational performance, we made tremendous progress in the implementation of our new maintenance management system and are seeing its benefits. We exceeded our controllable on-time performance targets in most months despite ongoing weather-related challenges. We also experienced outstanding controllable flight completion performance this year and achieved 100% performance on several days throughout the year.
Despite the weather issues that challenged our operation, we still generated incentive payments under the CPA, and worked to improve our financial results in the second half of the year through tight cost control. In light of the changing business and economic environment experienced during the last half of the year, our focus on cost reductions took on a fresh urgency, and we were pleased that controllable cost reduction initiatives implemented and identified during 2008, resulted in annualized hard savings of just under CAD7 million. Our continuing efforts to monitor and improve our fuel management processes also resulted in savings of approximately CAD8 million through fuel-burn management initiatives in 2008. These achievements bode well for continued solid cash flow performance going forward. Remaining cost competitive is vital to our future success. We enhanced and further focused on safety and quality through our new corporate safety and quality structure. This gives us the ability to leverage what we're doing well now and improve upon it. We have made great gains in this area with more to come. As well, our full implementation of our safety management system is progressing well, and we have successfully completed Phase III of four phases last year. This has already generated many benefits such as an approximate 60% reduction in bridge damage in 2008 through the use of new mobile bridge adapters for our regional jet aircraft.
Another significant accomplishment in 2008 was the successful testing of our new alternate systems operation control center, a key component of our business continuity plan designed to ensure we have systems in place should any disruption occur to our main Halifax operation site. In keeping with out goal to strengthen our operational foundation, we also installed a new information system data center with its own backup system. These new fully redundant locations are a vital part of our strategy to support operations. In order to provide more robust and reliable information services while reducing overall costs, we have implemented server virtualization. Virtualization allowed Jazz to implement multiple larger physical servers throughout the Company -- multiple larger physical servers throughout the Company and replace them with virtual servers. By eliminating a number of physical servers, we reduced cost associated with data center space, power and cooling, server administration and capital costs.
From a business-development point of view, much work and focus continues in this regard, and we have had a number of wins such as ground handling and consultation contracts that all contribute to our bottom line. We also -- we have been successful with our charter investment and growth strategy. Charter services grew 262% year-over-year to CAD7 million in revenue, expanding our offering beyond the Dash-8 charter fleet to include available capacity of CRJ aircraft. Future charter bookings are strong. We also have a number...
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