Canadian Airlines and Air Canada today
announced they have reached an agreement with The Loyalty Group, operator of
the Air Miles Reward Program.  The agreement successfully concludes
discussions between Canadian and The Loyalty Group, a creditor under the
airline`s restructuring plan.  In addition, the agreement ensures Air Miles
Collectors will continue to have the choice of redeeming reward miles with
Canadian Airlines, one of several airline partners belonging to the Reward
Program.  Air Miles Collectors will be able to redeem reward miles for Air
Canada flights beginning in May 2000.

``We have ensured throughout the restructuring process that Canadian`s
contractual agreements charge a fair, compensatory price for our services and
provide value to customers,`` said Paul Brotto, President and Chief Executive
Officer of Canadian Airlines. ``The new Air Miles agreement puts our
relationship with The Loyalty Group on a mutually rewarding and sound
financial footing, with on-going service to Air Miles customers.``

Added Calin Rovinescu, Air Canada`s Executive Vice President, ``The
agreement reached with The Loyalty Group is a financially sound business
decision as it provides revenue growth opportunity for Air Canada. Moreover,
it ensures Air Miles customers remain unaffected by on-going airline industry
restructuring in Canada.``

Terms of the agreement are confidential and will not be disclosed.

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