Air Canada Provides Update on Restructure

23rd Jun 2003

Air Canada has completed the first renegotiation of lease terms with one
of its aircraft lessors on three Airbus A-321 aircraft. The lessor, GATX
Capital, has agreed to rates and terms consistent with Air Canada`s
restructuring business plan.
Accordingly, Air Canada will now resume lease payments to GATX under
these revised terms.
“A core element of the successful restructuring of Air Canada requires a
reduction in existing aircraft lease costs to reflect current market rates.
This first agreement with an aircraft lessor moves us forward towards this
objective,” said Calin Rovinescu, Chief Restructuring Officer. “Concessions
from aircraft lessors will build on the groundwork achieved with recent labour
agreements to realign the airline`s cost structure allowing Air Canada to
compete profitably in a changed competitive landscape.”
Air Canada and its financial advisors are involved in intensive
negotiations with aircraft lessors and lenders with a view to revising
aircraft lease arrangements consistent with current market rates and the
Company`s restructuring business plan. The Company will resume aircraft lease
payments at restructured rates as new agreements are reached.


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