Air Canada Consolidates Regional Airlines

Air Canada today announced it will proceed immediately with the consolidation of its regional airline subsidiaries, Air Nova, Air Ontario and AirBC. Joseph Randell, President and CEO of Air Nova and Interim President of Air Ontario and AirBC, has been appointed President of the consolidated airline.

“Consolidation is clearly the best strategy for the future of Air Canada`s regional airlines and good news for communities across Canada,” said Robert A. Milton, President and Chief Executive Officer. “This decision is consistent with our focus on increasing shareholder value and with the current restructuring of the Canadian airline industry, the timing is right to proceed now. With over 20 years of airline industry experience including recent regional airline restructuring, Joe Randell is the ideal candidate to assume leadership of the new airline. Since he launched Air Nova in 1986, Joe has led the carrier through consistently profitable growth while establishing a strong market leadership position in the Atlantic region.”

“We are excited by the opportunities to better serve regional markets through consolidation,” said Joe Randell, President of Air Canada`s Regional Airlines. “Consolidation will provide increased operational flexibility to better respond to the needs of our communities. Scheduling and operational improvements, as well as growth opportunities, will directly benefit customers, communities and employees.”

Air Nova and Air Alliance*, Air Canada`s regional airlines serving Atlantic Canada and Quebec, were consolidated in March 1999. Given the benefits of this consolidation, a review of the additional opportunities to be derived from a further consolidation with Air Ontario and AirBC was subsequently conducted.

Should the sale of Canadian Regional Airlines not be successful pursuant to the undertakings given by the Competition Bureau, Canadian Regional Airlines will be integrated into the consolidated regional airline pending a successful financial restructuring of Canadian Airlines.