Air Canada received on Friday the order of the
Canada Industrial Relations Board (CIRB) declaring Air Canada and Canadian
Airlines to be a single employer with respect to all bargaining units. In
anticipation of this important ruling, negotiations with the CAW to bring
resolution to a number of outstanding labour issues started on Friday and are
currently ongoing.  Negotiations with the IAMAW are expected to resume on
Monday, October 2. Air Canada`s objective in light of the common employer
declaration is to work with the unions to reach agreement as soon as possible.
In addition, pending the outcome of these discussions, the carrier
intends to file with the CIRB a motion for an Interim Order under the Canada
Labour Code to facilitate the intermingling of the work forces of Air Canada
and Canadian Airlines, as well as to establish a framework to accelerate
labour integration, including the consolidation of bargaining units and
determination of applicable collective agreements.

The intermingling and labour integration application will deal with both
customer sales and service agents at airports and call centres and
baggage/cargo and maintenance employees represented by the CAW and the IAMAW
respectively.

``Friday`s ruling represents continued progress in achieving full
integration of Air Canada and Canadian Airlines in an expeditious manner,``
said Calin Rovinescu, Executive Vice President, Corporate Development and
Strategy.  ``The ability for customer service employees at Air Canada and
Canadian Airlines to serve each airline`s customers, interchangeably, is the
single most important initiative to streamline customer service delivery in
the new, integrated airline. With an intermingled workforce, the work can be
equitably distributed among our unionized employees.

``A full integration of our workforce is a win-win solution for both
customers and employees. Customers will benefit from increased convenience
through streamlined reservations, check-in and baggage handling.
Intermingling of customer service employees represents an effective way of
improving the work environment, reducing stress and, together with the
implementation of a common computer reservations system in October,
facilitating employee training.``

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