Air Canada Comments On Media Speculation on Its Plans For A Low Cost Carrier

A media report today suggests that Air Canada
may have abandoned its plans for its proposed western based low cost carrier.
This report is inaccurate.
While no start date had yet been announced for the new carrier, Air
Canada President and Chief Executive Officer, Robert Milton, recommended to
Air Canada`s Board of Directors on Wednesday that Air Canada postpone any
formal announcement regarding the launch of the low cost carrier until such
time as further planning is completed and the benefits to the Canadian
travelling public can be more fully communicated to consumers and communities
across the country.

“Recent public opinion research conducted by Ipsos-Reid confirms that
Canadians support increased low fare product offerings from Air Canada,” said
Mr. Milton. “We now need to continue working with governments and communities
throughout Canada which will benefit from our participation in this important
and rapidly growing sector of the market.”

“The Board wholeheartedly endorsed management`s recommendation to do
further work and consultation in this regard as Air Canada continues to focus
on reducing costs and thereby enable it to profitably continue expanding its
product offering in the low fare segment,” said John F. Fraser, Chairman of
the Board.

The results of the Ipsos-Reid survey can be viewed on the homepage of the
Air Canada website at under “Latest News.” The nationwide
telephone survey of 500 Canadians was conducted by Ipsos-Reid between November
30th and December 6th, 2001. The results of the survey are accurate within +/-
4.4% (19 times out of 20).