Air Canada Reports Continued Service Improvements; Plan On Target And Succeeding

Air Canada announced today that integration is
on target and succeeding, efforts to improve customer service are making a
clear difference, and customers will realize the significant benefits of an
integrated customer service workforce and a single computer reservations
system by October 22.

``As we enter the home stretch of the integration of Air Canada and
Canadian Airlines, we are finalizing initiatives which will have a positive
impact on customer service,`` said Robert Milton, Air Canada President and
Chief Executive Officer. ``One of the major achievements in September was the
conclusion of a customer service workforce integration agreement with the CAW.
This important agreement will allow Air Canada and Canadian Airlines customer
service employees to serve each others` customers interchangeably and thereby
allow us to spread the workload equitably. This agreement, combined with our
planned transfer to a single computer reservations system by October 22 will
result in significant improvements in call centre and airport service
levels,`` he continued.

Robert Milton`s September report includes the following:


- A MILESTONE AGREEMENT WAS REACHED WITH THE CAW UNION ON THE INTEGRATION
  OF THE CUSTOMER SERVICE WORKFORCES.

- INTENSIVE PREPARATIONS CONTINUED FOR THE OCTOBER 22 MOVE TO ONE
    RESERVATIONS SYSTEM. The transfer of about one million Canadian
Airlines customer reservations to Air Canada`s ResIII system involves over
6,100 employees and 150,000 hours of training. The entire process, including
technical preparations, will have required 36,000 person-days of work - almost
as much as Air Canada`s Y2K preparations but in one third the amount of time.

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- 747 NEW EMPLOYEES STARTED ON THE JOB. They include call centre customer
sales and service agents, airport customer service agents, cargo and baggage
handlers, as well as pilots and flight attendants.

- FACILITY IMPROVEMENTS CONTINUED AT TORONTO`S PEARSON AIRPORT. A new
domestic ticketing counter with 11 new positions opened opposite the Rapidair
check-in counters. Twelve new Business Class check-in counters are under
construction, which will provide 30 percent more business class check-in
capacity. A new international baggage claim carousel opened adding 25 percent
more capacity.

- A RECORD 6,500 CUSTOMERS PER DAY CHECKED-IN USING SELF-SERVICE EXPRESS
CHECK-IN KIOSKS. There are now 93 kiosks across the country, including five
new kiosks in Calgary in September.

- CONNECTING BAGGAGE SERVICE IMPROVED AT VANCOUVER INTERNATIONAL AIRPORT
WITH THE OPENING OF A JOINT CONNECTION BAGGAGE CENTRE.

- CARGO HANDLING AT AIR CANADA AND CANADIAN WAS COMPLETELY INTEGRATED AND
TRANSFERED TO ONE COMPUTER SYSTEM. Cargo services are now more efficient and
all customers have access to Air Canada`s customer-friendly cargo tracing
system.

- AIR CANADA AND CANADIAN AIRLINES` WEBSITES WERE INTEGRATED INTO A NEW
ONE-STOP, USER-FRIENDLY WEBSITE AT WWW.AIRCANADA.CA

``Our 180-Day Commitment to Customer Service is showing results as we are
now hearing positive feedback from our customers,`` said Robert Milton. ``This
feedback, while encouraging, only serves to strengthen our commitment to give
our customers the very best service they can expect,`` he concluded.

Robert Milton`s September report is attached and is also available at
www.aircanada.ca.


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