Air Canada Responds To High Fuel Prices With Temporary Fuel Surcharge For Travel In Canada

In response to sustained high fuel prices, Air
Canada announced today the implementation of a fuel surcharge of $15.00 CDN
one way for travel on domestic routes, effective on tickets purchased as of
May 31, 2001. The fuel surcharge is temporary and will be adjusted according
to market fluctuations in fuel prices.

Air Canada`s domestic surcharge compares to an $18.60 USD ($27.16 CDN)
fuel-related one way domestic surcharge by major US carriers. A fuel surcharge
has been in place in the US domestic market since January 2000. In addition,
US carriers have implemented, on average, an 11 percent domestic fare increase
since January 2000, compared to Air Canada`s 6 percent domestic fare increase,
which was announced on December 21, 2000 and was effective January 1, 2001.

“In 2000, Air Canada made a voluntary public commitment to not increase
domestic fares during the first year of integration. We met that commitment,
however we significantly constrained our ability to compensate for fuel price
increases, which, in total, adversely affected our operating income by almost
$400 million in 2000,” said Lise Fournel, Executive Vice President,
Commercial. “This surcharge provides transparency on the impact of fuel prices
on our operational costs,” she added.
In addition, effective May 31, 2001, Air Canada will adjust its NavCanada
surcharge for one way domestic travel from $7.50 CDN to $9.00 CDN, which is in
line with recent NavCanada fee changes announced by other Canadian carriers.