Air Canada reported today that strong progress
is being made on the integration of Air Canada and Canadian Airlines, and that
service to customers is improving daily and will continue to improve.

``Everyone at Air Canada is working to get service back to the high
standard that our customers expect and deserve,`` said Robert Milton,
President and Chief Executive Officer. ``In August our operation started to
stabilise, as we refined processes to deal with increased passenger volumes,
added new staff and benefited from more favourable weather.

``We`ve just experienced the busiest two months in our history and the
Labour Day weekend traditionally marks the shift from the summer travel season
to the busy business travel and cargo shipping period.  I assure our customers
that our focus will continue to be improved service,`` he said, reaffirming
the airline`s plans to add more customer service staff and to continue to
upgrade facilities over the coming weeks.

``Although the integration is still a complex work in progress, we are
reaching major milestones, such as one fully integrated schedule for both
airlines,`` he continued. ``Our goal is to complete the integration as quickly
as possible while delivering the best possible service to our customers.``

The first monthly report tracking progress in the 180-day Commitment to
  Customer Service includes the following August highlights:

-  652 new, fully trained employees started on the job, primarily in
    airport and call centre customer sales and service. They include 112
    airport customer sales and service agents, 147 call centre customer
    sales and service agents, 152 flight attendants, 38 cabin groomers,
    79 maintenance employees and 124 baggage handlers and aircraft service
    attendants.

-  385 new employees are currently in training, including 40 pilots,
    233 call centre customer sales and service agents and 112 aircraft
    services and baggage handlers.

-  Facilities at Pearson Airport are being continuously upgraded to ease
    congestion and improve check-in and reservation services.  In August
    at Terminal 2, two additional priority check-in counters were added, a
    new ticketing area was opened and eight new Express self-service
    check-in kiosks were added, bringing the total to twenty.  Two new
    aircraft bridges for domestic flights and a third for U.S. flights
    will open in the coming days.

Mr. Milton confirmed that the integration of the computer systems of Air
Canada and Canadian is also on schedule. In October, most commercial software
applications will be integrated and for the first time, Air Canada and
Canadian employees will access the same database to provide customers with
service and information for any flight in the integrated system.

``There are 147 days left and we`re ahead of plan.  We are building a
great global airline and the job is not finished yet, however our investment
in improving customer satisfaction is starting to pay off,`` he concluded.

A copy of the first monthly report is available at www.aircanada.ca under
the 180-Day Commitment to Customer Service icon.

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