Air Canada Comments On AMR Statements

Air Canada has issued the following comments respecting statements made by Don Carty, Chairman and CEO of AMR Corporation, parent company of American Airlines, at a press conference held in Toronto today:

Canadian Airlines and American Airlines approached Air Canada to initiate talks in January 1999 with the view to combining Air Canada and Canadian Airlines within the OneWorld Alliance.

Following extensive analysis, Air Canada concluded that without a substantial value contribution from AMR and concessions from Canadian`s creditors to compensate Air Canada for agreeing to acquire Canadian Airlines and for the reduced value of OneWorld versus Star Alliance, Air Canada was not prepared to proceed with the transaction. AMR terminated the discussions. Air Canada never agreed to join OneWorld. Lufthansa and United Airlines had been made aware of these discussions.

Air Canada never requested that a Section 47 be issued and this can be confirmed by the Minister of Transport`s Office.