ACE Aviation Holdings has reported operating income of $452 million for the full year 2005, an improvement of $335 million from 2004. This is despite an increase in fuel expense of $592 million or 37 per cent versus
2004.

Passenger revenues were up $960 million or 13 per cent reflecting increases in all
markets, due to an improvement in passenger load factor and an increase in
passenger revenue per revenue passenger mile (yield). Unit cost for 2005, as
measured by operating expense per ASM, rose 3 per cent from 2004. Excluding
fuel expense, unit cost was down 4 per cent. EBITDAR(1) amounted to $1,351
million, an improvement of $205 million from 2004. Net income for 2005 totaled
$258 million compared to a net loss of $880 million in 2004, which included
reorganization and restructuring items of $871 million.
 
  “I am pleased with our accomplishments in the first full year since we’ve
emerged from CCAA,” said Robert Milton, Chairman, President and CEO, ACE
Aviation Holdings Inc. “While rising fuel costs have made it challenging, our
financial results for the full year are among the strongest in the industry
and we’ve made good progress in building shareholder value, reinventing our
business and winning over more customers.
  “In addition to my appreciation for the unrelenting efforts of our
employees and the support of our shareholders, on behalf of all of us at ACE,
I would like to thank our customers for their ongoing loyalty which has
enabled us to achieve twenty-two straight months of record load factors.
  “We took significant steps during the year in creating shareholder value
by highlighting the value inherent in ACE subsidiaries with the successful
monetization of Aeroplan and early in 2006, Jazz. The market’s valuation today
of Aeroplan and Jazz at $2.6 billion and $1.2 billion respectively is a solid
endorsement by the market of ACE’s business strategy going forward.
  “While progress has been made at ACTS in terms of developing the business
as a stand alone company, more work remains to be done. The priority for the
new leadership at ACTS in 2006 will be to develop the business and increase
the focus on its operations, customer service and productivity to improve
financial results. ACE will look for opportunities to monetize ACTS at the
earliest appropriate opportunity. ACE will also continue to look for
opportunities to enhance the value of other subsidiaries.
  “In the fourth quarter, revenue performance was strong, driven by a
17 per cent increase in passenger revenue on capacity growth of 8 per cent in
a traditionally weak quarter; but this was not enough to offset rising fuel
costs. We must renew our efforts to achieve a cost structure that will allow
us to remain profitable in an environment of record high oil prices. This
entails an unrelenting focus on reducing costs in all areas while ensuring we
retain the highest levels of safety and remain the airline of choice for
consumers.”
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