Canadian Airlines was informed yesterday that
the Alberta Court of Appeal has dismissed an application to appeal an Alberta
Court of Queen`s Bench June 27, 2000 decision to approve Canadian Airlines`
Plan of Compromise and Arrangement, under the Companies Creditor Arrangement
Act. The appeal application was filed by Resurgence Asset Management, an
unsecured creditor of Canadian Airlines International Ltd.

``This decision, along with today`s announcement welcoming Canadian
Regional Airlines into the Air Canada network, moves forward the process of
full integration of Air Canada and Canadian Airlines,`` said Paul Brotto,
Canadian Airlines` President and Chief Executive Officer.

On July 6, 2000, Canadian Airlines International Limited became a wholly
owned subsidiary of Air Canada. On August 30, 2000, following the close of
the 60-day sale period of Canadian Regional Airlines, Air Canada was advised
by Donaldson, Lufkin and Jenrette, the authorized selling agent, that no
qualified bids had been received. Canadian Regional Airlines thus remains an
indirect wholly owned subsidiary of Air Canada.

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