Air Canada Secures USD$285 Million Component Maintenance Agreement

Air Canada today announced that it has secured
a 16-year, USD$285 million agreement for the maintenance and repair of
components for Atlantic Coast Airlines` fleet of Canadair Regional Jets. The
contract came into effect September 1, 2001.

Maintenance work will be performed at Air Canada`s Dorval Maintenance
Center located at the airline`s headquarters in Montreal. Atlantic Coast
Airlines` CRJ fleet is expected to grow to at least 96 aircraft by the end of
“A major long term contract such as this reflects Air Canada`s strong
reputation for quality service and technical expertise in a number of fleet
types including the Canadair Regional Jet,” said Robin Wohnsigl, President,
Air Canada Technical Services. “Our agreement with Atlantic Coast Airlines is
consistent with our business strategy to leverage our expertise in maintenance
repair and overhaul (MRO) and grow our third party work by offering the
world`s only one-stop shop for servicing the CRJ aircraft.”

In November 2000 Air Canada announced the formation of Air Canada
Technical Services to capitalize on the airline`s ability to compete on a
global basis as a maintenance, repair and overhaul profit centre.
Air Canada Technical Services is responsible for the maintenance,
engineering, repair, supply and purchasing to support Air Canada`s mainline
fleet of 240 aircraft, as well as third party technical services, in five
maintenance categories: airframes, engines, components, line and aircraft

Air Canada Technical Services employs approximately 8000 staff in Canada,
the U.S. and Europe, with four major maintenance base centers located in
Montreal, Toronto, Winnipeg and Vancouver.

Atlantic Coast Airlines serves over 66 destinations in 24 U.S. states and
Canada with over 740 daily flights. The airline operates in conjunction with
United Airlines as a United Express carrier out of Washington Dulles and
Chicago O`Hare, and with Delta Air Lines as a Delta Connection partner with
flights from New York LaGuardia and Boston. In addition to the CRJ fleet, the
company also operates a number of Fairchild-Dornier 328JETs, as well as
Jetstream-41 and J-32 turboprop aircraft.


The development of Air Canada`s third party MRO work is consistent with
the Air Canada Action Plan launched August 1, 2001. The Plan is being
implemented to transform and reengineer Canada`s national carrier to meet new
challenges and opportunities of the rapidly changing airline industry. Among
the key elements of the Air Canada Action Plan are the reconfiguration of the
fleet, the introduction of innovative new products, the e-powering of Air
Canada`s customers; the planned launch of a low-fare carrier later this year;
and various new cost-reduction and profitability initiatives. Today`s
announcement is part of a series of profitability initiatives that include the
airline`s first on-line seat sale, the carrier`s expansion of the South
Pacific network, the introduction of competitive, low one-way fares between
Vancouver, Calgary and Edmonton and the launch of a worldwide seat sale
August 29, 2001.