Air Canada has proposed binding arbitration in
an attempt to resolve the current impasse between the Air Canada Pilots
Association (ACPA) and the company.

The initiative was formally made to ACPA on July 15 following the
decision by ACPA to walk away from the negotiating table on Friday, July 14.

``The travelling public is relying on Air Canada and its pilots and we
must find a way to remove the current uncertainty,`` said Calin Rovinescu,
Executive Vice-President, Corporate Development & Strategy, who is leading the
airline`s negotiating team.

``We were firmly resolved to conclude a settlement through the normal
collective bargaining process. However, in view of ACPA`s decision to break
off negotiations, we must find another way of resolving this contract dispute
once and for all.``

``We have made to ACPA the most generous proposal ever made to our pilots
in the history of the company, a contract that we believe addresses all their
issues and still ACPA walked away,`` he added.

``The travelling public should not be made to suffer the consequences of
this impasse. The next logical step is to put the matter before an experienced
arbitrator. We are committed to finding a fair resolution and we will accept
the outcome. ACPA has also said it wants a fair solution. Under the
circumstances, we believe binding arbitration represents the best way of
moving forward,`` concluded Mr. Rovinescu.

ACPA has not given the company notice of intent to strike. According to
Canadian labor law, a union must give 72 hours notice prior to taking any
strike action.

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