Canadian Regional Airlines To Join Air Canada Network

Following the close of the 60-day sale period
of Canadian Regional Airlines, Air Canada has been advised by Donaldson,
Lufkin and Jenrette, the authorized selling agent, that no qualified bids have
been received. Air Canada has thus fulfilled its obligations in accordance
with the undertakings it negotiated with the Competition Bureau in December
1999 with respect to the divestiture of Canadian Regional Airlines.

Canadian Regional Airlines remains a subsidiary of Canadian Airlines
International, and therefore an indirect wholly-owned subsidiary of Air
Canada, until it is fully integrated into Air Canada`s regional operations.

``I am delighted to officially welcome Canadian Regional Airlines to the
Air Canada family,`` said Robert Milton, Air Canada`s President and Chief
Executive Officer. ``I recognize the patience and professional performance of
Canadian Regional employees during this difficult time, and I believe this is
the best outcome for all. It is an important milestone in Air Canada`s
restructuring and it eliminates uncertainty while ensuring direct,
uninterrupted access to Air Canada`s global network in communities from coast
to coast.  It`s business as usual for customers and employees of Canadian
Regional Airlines.``

Said Joe Randell, President of Air Canada`s regional airlines, ``We are
now able to move forward with the consolidation of Air Canada`s regional
airlines and Canadian Regional Airlines. Consolidation is the best strategy to
ensure a viable regional network with local market focus. Communities across
Canada will continue to benefit from direct access and seamless service to Air
Canada`s entire network. By bringing together these four strong regional
airlines we will be better able to serve our customers and provide security
and opportunities for the employees of these companies.``

Air Canada`s regional airlines, AirBC, Air Ontario and Air Nova, and
Canadian Regional Airlines, will continue to operate separately, while
offering the same benefits to all customers of Air Canada subsidiaries during
Air Canada regionals` consolidation, until a common operating certificate is


The consolidated Air Canada regional airlines will continue to have a
decentralized organization to maintain a strong presence in all existing
regional markets. Calgary and Halifax will develop as strong western and
eastern bases complementing existing bases across Canada. Regional bases with
senior management will be located in Vancouver, Calgary, London, Toronto,
Quebec and Halifax. Flight crews will be based at these locations as well as
at Victoria and Saskatoon.

Air Canada`s regional airlines, AirBC, Air Ontario and Air Nova, employs
2887 people. In 1999, they served 4.15 million customers, and operated more
than 600 daily flights with 82 aircraft to 84 destinations. Canadian Regional
Airlines employs 2047 people. In 1999, it served 3.4 million customers, and
operated 366 flights per day with 56 aircraft to 39 destinations.