Air Canada Creates New Aeroplan Division

Air Canada announced today that it has
reorganized its Aeroplan frequent flyer unit as a new Division dedicated to
fully developing Aeroplan`s potential and realizing its true value as an
international leader in customer loyalty management.
``The new Division will focus on leveraging the program`s enormous
potential through dedicated management and staff resources,`` said Calin
Rovinescu, Executive Vice President Corporate Development and Strategy. ``Our
objective is to structure Aeroplan in a more efficient and focused manner in
order to further improve the quality of the program`s customer service levels
and incentives and to increase and further leverage our commercial
partnerships.``

The creation of the new Aeroplan Division is the first of several new
business ventures Air Canada is undertaking as part of its strategy to create
new profit centres within the Corporation and to enhance shareholder value.
With this objective in mind, Air Canada will review the merits of establishing
a separate corporate entity and of launching an Initial Public Offering for
Aeroplan in the future. In case of an Initial Public Offering, Air Canada
would retain the majority ownership and control of the company.

The new Division will be led by Rupert Duchesne, most recently Chief
Integration Executive, Air Canada and Canadian Airlines, as the Division`s
President.
``I am delighted to appoint Rupert Duchesne to lead the new Aeroplan
Division,`` said Mr. Rovinescu. ``Since joining Air Canada in 1996 as Vice
President, Marketing, Rupert has successfully led Air Canada`s commercial
initiatives through numerous milestones, most recently as Chief Integration
Officer for Air Canada and Canadian Airlines.``

Since their inception in 1984, Aeroplan and Canadian Plus have become
enormously successful vehicles, both in cementing brand loyalty and in
generating revenues. Today, Aeroplan members represent over 50% of the
airline`s traffic and contribute over 60% of its passenger revenue. The merger
of Canadian Plus into Aeroplan in January 2001 will make the program even
stronger, with over five million members.

Aeroplan`s mandate is being expanded to channel the broad purchasing
power of its huge membership base in ways that generate additional revenues
and brand loyalty. The new Division will pursue an aggressive growth strategy
with the ambition of adding significant revenues to this sector of activities.
This will be achieved by building on existing agreements as well as by
developing new partnerships, including expansion into new consumer categories
as well as loyalty and customer relationship management service and advisory
businesses. In addition, Aeroplan will exploit e-commerce opportunities and
expand its current on-line features to include a virtual shopping centre,
where members will be able to earn Aeroplan miles for purchases of merchandise
and other non-air services.

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``Aeroplan miles are already a much valued incentive,`` said Rupert
Duchesne. ``At the request of our customers, we aim at further increasing that
value through a significant extension of accumulation and redemption
opportunities through various types of partnerships, both travel and
non-travel related.``

In addition, the new Division will create a number of exciting employment
opportunities across the country.


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