Air Canada Introduces New Commission Caps for Travel Agents

Air Canada today followed other major North
American carriers in announcing the restructuring of its travel agency cap on
commissions for tickets issued in Canada and the United States for domestic
Canada and transborder U.S. travel.

Effective August 28, 2001, 00:01 EDT, tickets purchased in the United
States to all destinations in Canada, will continue to earn a 5 per cent base
commission with a maximum of USD $20 for round trip travel and USD $10 for one
way travel. The caps on commissions paid to U.S. agencies are currently USD
$50 and USD $25 respectively.

Effective September 24, 2001, 00:01 EDT, tickets purchased in Canada to
all Canada and U.S. destinations will continue to earn a 5 per cent base
commission with a maximum of CAD $28 for round trip travel and CAD $14 for one
way travel. The caps on commissions paid to Canadian agencies for domestic
travel are currently CAD$60 and CAD$30, respectively, and for transborder
travel CAD $70 and CAD $35, respectively.

The restructuring of travel agency caps to remain cost competitive with
other major North American airlines is consistent with Air Canada`s Action
Plan launched August 1, 2001. The Plan is being implemented to transform
Canada`s national carrier to meet the 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 follows other initiatives
including the airline`s successful on-line seat sale launched August 2, the
carrier`s expansion of its South Pacific network in response to market growth
opportunities and the introduction of competitive, low one-way fares between
Vancouver, Calgary and Edmonton.

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