Air Canada - President & Ceo Robert Milton Sets Record Straight at Annual Meeting of Shareholders

At Air Canada`s annual meeting of shareholders in
Ottawa today, the airline`s President and Chief Executive Officer, Robert
Milton, reviewed the carrier`s strong financial and operational performance
over the past 15 months—all the more significant in light of the additional
challenge of thwarting a hostile take-over bid during the last five months of
1999.

While the focus of Mr. Milton`s comments were to discuss the future
benefits that a strong, integrated airline will bring Air Canada`s customers,
employees and shareholders, he also addressed a number of misperceptions
regarding the integration process currently underway:

``As we move ahead in 2000, our focus is firmly fixed on a successful
integration process. From the outset it was clear to us that the mechanics of
integrating the two airlines would create some challenges. For the past few
weeks, the integration has been subject to microscopic scrutiny and has
generated a great deal of criticism in the media and the political arena.

``That`s why I think it`s important to set the record straight. For example, demand for seats on certain routes has increased
dramatically. We are working with individual communities to fine tune the
schedule and add capacity where there`s a need. Up to now, we`ve added over
5,700 seats a week in Canada.

``Frequent flyer point redemption has gone up beyond normal levels. We
have already adjusted our allocation accordingly to better suit demand and we
will continue doing so as required.

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``Demand on the call centres of Air Canada and Canadian has been very
high. Many of the changes occurring during integration are generating phone
calls about terminals, alliances, code sharing and so on.  We`re struggling at
call centres, but I want to be clear - we have not reduced staffing. In fact,
we`re hiring more staff to handle the increased volume and we will
continuously adjust, as required.

``One of the areas that is causing more work is the inability of the
computer reservation systems of Air Canada and Canadian to talk to each other.
They operate in different languages and it will be this fall before we have a
fix in place.

``Customers are telling us they`re facing longer line-ups at airports and
busier phone lines - and it`s true. But the fact is - we are creating a new
airline that is generating even more traffic than we expected. Our April
results are nothing short of spectacular. We carried 25 percent more traffic
than last year, with capacity growing by 15 percent. Our load factor was 74.6
percent, up five points from last year. So our customers are seeing a busier
airline.

``While our new integrated network schedule added 1% extra capacity, the
combined traffic of Air Canada and Canadian Airlines for April reflects an
overall increase of 7.2%. People are flying with us in record numbers, and the
new schedule we`ve developed is drawing more business to us.

``Our challenge, and my commitment to our stakeholders, is to find ways
to handle this exceptional growth and success story and still provide superior
customer service. There are still bumps ahead as we move down the road into
our busiest travel period this summer, but we are on track to deliver one of
the world`s greatest airlines for Canada.

``Stories of disappearing seat sales are simply untrue. We have launched
two widely advertised seat sales this year with discounts of up to 40%, in
line with our sales over the past two years. So far in 2000, almost 200,000
more customers have taken advantage of Air Canada seat sales than during the
same period last year.

``Stories of vast increases in denied boarding of passengers are also not
true.  Our figures show that Air Canada`s track record remains significantly
better than the track record of the top US carriers.

``Changes to our flights and terminal locations are creating some
uncertainty and some inconvenience for passengers. This is primarily a problem
at Pearson International Airport. We are using a combination of staff,
transportation and a public communications campaign to help customers - and
employees - cope with the changes underway.

``At the core of all these problems is the inescapable fact that there`s
no problem-free way to put two companies together. We can`t do it in
isolation, or on a trial basis or behind closed doors. We have to do it while
the airlines are running, while we serve customers and while the media is
watching.

``We have to be prepared to expect problems, listen to our stakeholders, make adjustments, fix the snags, and move on. That`s what we have been doing and that`s what we will continue to do.``


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