Offer To Purchase Canadian Airlines Corporation Extended To December 23, 1999

Air Canada announced today that the Offer made by 853350 Alberta Ltd., a newly formed corporation owned in part by Air Canada, to purchase all the issued and outstanding Common Shares and Non-Voting Shares of Canadian Airlines Corporation has been extended to 5:00 p.m. EST on December 23,1999. The Offer is at a price of $2.00 per share and Air Canada is providing all of the funding required to complete the offer.

The precise number of shares deposited under the Offer as at 5:00 p.m. today is not yet available. While several key conditions of the bid remain to be satisfied, Air Canada and the Offeror will seek to satisfy all the conditions by December 23.

Air Canada will seek to obtain the requisite regulatory consents as well as clarification respecting the terms of any new or proposed legislation or policy that would be applicable as a result of the policy framework announced by the Minister of Transport on October 26,1999. In addition, the extension of the Offer will permit Air Canada to work closely with AMR to seek to achieve the condition of the Offer relating to AMR.
The extension of the Offer will provide shareholders of Canadian Airlines (including in particular employee shareholders with share purchase entitlements) who were unable to tender prior to the original expiry time the opportunity to do so and benefit from the Offer.