Competition Bureau Rejects Jetsgo

Air Canada has been advised by the
Competition Bureau that it has dismissed a complaint filed by Jetsgo
Corporation (Jetsgo) regarding Air Canada`s recent agreement with the
Government of Quebec for the provision of reduced fares on 15 regional routes
and the purchase of government air travel from the airline.

“The Competition Act is intended to promote competition, not protect
competitors. This decision clearly illustrates that the Competition Act cannot
be improperly used as a tool to advance business strategies,” said Calin
Rovinescu, Executive Vice President, Corporate Development and Strategy. “The
ruling allows us to move forward with an agreement that is in the interests of
consumers and ensures continued service and low fares throughout Quebec.”

On November 13, 2002 Air Canada announced an agreement in principle with
the Government of Québec for the continued provision of service by Air Canada
Jazz throughout its Québec network, including the introduction of Québec-wide
low, flexible, one way Internet-only fares designed to stimulate local travel.
The three year agreement in principle ensures that Québec customers have
access to low, flexible Internet-only fares for half of the local traffic
capacity between regional communities and both Québec and Montréal.

Under the agreement in principle the Government of Québec agreed to
purchase approximately $2.5 million in additional tickets annually for travel
by Government and Government agencies.