Air Canada Completes Aircraft Sale-Leaseback Transaction Valued At Approximately Cad $565 Million

Air Canada today announced the completion of an
aircraft sale-leaseback transaction providing approximately CAD $565 million
of new funding for the carrier. In an agreement with GE Capital Aviation
Services, Inc. (GECAS), Air Canada will sell and leaseback 16 Airbus A320 and
one A319 owned aircraft.

“This transaction demonstrates Air Canada`s ability to raise liquidity in
these difficult times and is consistent with the airline`s objective of
maintaining stability in the current economic environment,” said Rob Peterson,
Executive Vice President and Chief Financial Officer. “While further cost
reductions are still required, we remain confident that the company`s
liquidity requirements will continue to be met in light of current and
anticipated needs.”

In addition, under the agreement, Air Canada will lease six new Airbus
aircraft comprised of either A319s or A320s to coincide with the return of
older A320 aircraft in 2003 and 2004. With the replacement of the six aircraft
averaging approximately 12 years of age, with new aircraft at approximately
the same lease costs, Air Canada will benefit from reduced maintenance costs
and the operational efficiencies associated with the use of the latest
aviation technologies.