Robert Milton, President and Chief Executive
Officer, Air Canada told chief executive officers of the U.S. aviation
industry today that the time has come for the United States and Canada to
resume efforts to progressively remove all restrictions in order to arrive at
a fully liberalized air transport market.

Mr. Milton briefed U.S. airline CEOs on Air Canada`s “Open Skies Plus”
proposal at an Air Transport Association (ATA) Board of Governors` meeting in
Washington. In a December 6 letter to U.S. Transportation Secretary Mineta and
Canadian Transport Minister Collenette, Air Canada proposed a full Open Skies
Agreement between the U.S. and Canada including the exchange of modified sixth
freedom opportunities giving both U.S. and Canadian carriers the ability to
carry domestic traffic from either country through their respective hubs. To
date, the United States has established `open skies` agreements with over
50 countries, yet the current Canada-U.S. agreement still includes a number of
restrictions and is not a full open skies agreement. Mr. Milton told the ATA
Board that Air Canada`s modified sixth freedom proposal does not create new
traffic rights, but rather allows Canadian and U.S. carriers to take full
advantage of existing network and hub opportunities and removes restrictions
on cargo and third-country rights that were part of the original Air Transport
Agreement in 1995.

Mr. Milton urged the ATA Board of Governors to impress upon their
government the need to build on the success story of the 1995 Air Transport
Agreement, noting that the 1995 agreement has been a resounding success,
facilitating major growth in transborder traffic from 13 million passengers in
1994 to over 20 million passengers in 2001.

Further highlights of Mr. Milton`s brief to the ATA Board of Governors as
well as a backgrounder entitled `A North American Air Policy For The 21st
Century “are available at www.aircanada.ca on the home page under “Latest
News”.

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