Air Canada Welcomes UK Competition Commission Report

Air Canada today welcomed the findings of the
United Kingdom`s Competition Commission investigation on the impact of Air
Canada`s recent acquisition of Canadian Airlines on air transportation between
the United Kingdom and Canada.

``We are very pleased with the findings of the Competition Commission,``
said Lise Fournel, Air Canada`s Executive Vice President, Commercial. ``Air
Canada has been serving travellers between the UK and Canada for more than
fifty years and has long recognized the importance of maintaining competitive
service offerings that respond effectively to the needs of the market.  We are
committed to ensuring Air Canada remains the preferred choice for consumers in
this highly competitive market.``

In its report, the Commission found that on the major London-Toronto
route ``there was effective competition in the case of price-sensitive (mainly
leisure) passengers from former charter operators now redesignated as
scheduled airlines and from other charter operators, and the prospect of
expansion or entry from airlines at Heathrow, Gatwick or Stanstead.``

The Commission noted that ``there were few constraints on British Airways
expanding its services at Heathrow and that it was able to provide effective
competition, as may other operators at Heathrow.``

Air Canada and Canadian Airlines operate a combined schedule between
Canada and the United Kingdom offering customers a total of 13 flights a day
between London and Vancouver, Calgary, Ottawa, Montreal, Toronto, Halifax and
St. John`s, and daily flights between Toronto-Glasgow and Toronto-Manchester.

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On May 2, 2000, the Consumer and Corporate Affairs Minister of the United
Kingdom referred Air Canada`s pending acquisition of Canadian Airlines to the
UK Competition Commission for investigation and report under the provisions of
the Fair Trading Act 1973.  The investigation was undertaken with respect to
non-stop city-pair flights between London Heathrow and Canada.

Air Canada inaugurated its first transatlantic service July 22, 1943
between Canada and the United Kingdom with its Montreal - Prestwick (Glasgow)
route.  The route was subsequently extended to London on September 16, 1946.
Air Canada continued to launch non-stop air service between Canadian cities
and London from Toronto in 1957, Halifax via Prestwick in 1960, St. John`s
(Gander) in 1961, Vancouver and Calgary in 1966, and Ottawa in 1985.

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