Air Canada Responds To Court Approval Of Canadian Airlines Debt Restructuring - Delighted With Outco

Air Canada was informed today that the Alberta
Court of Queen`s Bench has approved Canadian Airlines Corporation`s Plan of
Compromise and Arrangement under the Companies` Creditors Arrangement Act
(CCAA). Madame Justice Marina Paperny delivered her decision in court earlier
in the day.

The Court ruled that the Plan was fair, reasonable and equitable. It
furthermore found that the Plan represents a solid chance for the continued
existence of Canadian, maintains over 16,000 jobs, protects consumers and
preserves the integrity of our national transportation system while we move
towards a new regulatory framework.

``We are delighted with this outcome. This decision provides Canadian
Airlines with the stability necessary to continue its business operations in
conjunction with Air Canada,`` said Robert Milton, President and Chief
Executive Officer of Air Canada.

The decision clears the way for Canadian Airlines Corporation to complete
the closing process for the Plan. Canadian Airlines International Limited
will become a wholly-owned subsidiary of Air Canada, once all eligible
creditors have been paid.

``Our focus remains firmly fixed on a successful integration of the two
carriers for our customers, employees, and all of Canada. Today marks an
important milestone in this process,`` concluded Mr. Milton.