In response to improving conditions in the
Canadian market and ever increasing consumer response to its Tango service,
Air Canada announced today it would increase domestic capacity and add two new
destinations to its Tango network. With the addition of Windsor and London,
Ontario to its network, Tango will provide Canadians with low fare, high value
service to 23 Canadian destinations from coast to coast.

“Air Canada`s January 74.5% domestic load factor was the highest of any
major North American carrier and was a full six percentage points higher than
for the same month in 2001. In light of improving market fundamentals, we will
continue to closely monitor demand for additional capacity and will adjust
flying levels as required to fulfill the needs of the travelling public. It is
encouraging to note that current load factors and strong advance booking
trends point to further recovery in the domestic market,” said Robert Milton,
President and Chief Executive Officer.

“In order to meet anticipated demand for the summer peak period, we will
increase overall domestic capacity by approximately five percent year over
year in the third quarter with increases of up to ten per cent on certain
routes.”

“Tango`s current high load factors and strong advance bookings confirm
that Canadians do want low fare, no frills service from Air Canada,” said Mr.
Milton. “Since it commenced operations, Tango`s traffic performance has
exceeded all expectations with a load factor that has been consistently higher
than that of the mainline carrier`s domestic system.  We will continue to
monitor demand for Tango and assign capacity to provide more Canadians in more
communities with the service they are looking for,” he added.

Tickets on the new routes will be available for sale February 28. All
Tango fares are available with no minimum stay and no advance purchase
requirement. Further information on the schedule and fares for the new Tango
services announced today will also be available on February 28.

With new Tango service to St. John`s since January 7, Thunder Bay,
Regina, and Saskatoon service commencing April 1, the summer addition of nine
new destinations and 14 new routes announced January 31 and the two new
destinations and nine new routes announced today, the Tango network expands to
include 23 Canadian cities from coast to coast. By summer 2002, Tango will
offer up to 98 daily departures compared to 36 daily departures currently
available.
Recent survey results indicate strong support among Canadians for Air
Canada`s provision of a low fare carrier. A nationwide telephone survey of 500
Canadians conducted by Ipsos-Reid between November 30 and December 6, 2001
found that 82 per cent of Canadians would fly a low fare, no frills airline
operated by Air Canada and evidence to date strongly bears this out.

Tango`s passenger servicing costs are significantly lower than for
comparable mainline Air Canada flights as a result of its efficient aircraft
seating configuration, web booking tools, call center distribution system and
use of electronic tickets. Over 80 per cent of Tango flights are booked on its
dedicated website at www.flytango.com.

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