Air Canada announces that it has, on a preliminary basis, reviewed the revised terms of the Onex/AMR offer for the shares of Air Canada announced earlier this morning. While Air Canada will make a more detailed announcement later today, its preliminary observations regarding the revised Onex/AMR offer as follows:

1) The increase of the “sticker price” to $17.50 per share does not provide significantly more value. The revised offer involves no more than the addition of $100 million financed by AMR, which translates into no more than approximately an additional $0.50 per Air Canada share in cash on a pro rata basis, assuming the purchase of all AMR rights by Air Canada shareholders.

2) The fully diluted interest of Air Canada shareholders in the continuing entity following the revised Onex/AMR offer would go up by only 1.6% to 61.7%, compared with 60.1% under the offer as it stood yesterday. This compares with a 90% fully diluted interest under the Air Canada proposal as it currently stands.

3) The revised Onex/AMR offer is to be open for acceptance for 10 days after mailing, expected to be completed next week. However, this offer is conditional on Onex attacking and unwinding the very beneficial arrangements entered into by Air Canada with its Star Alliance partners. In Air Canada`s view, this is an extremely remote possibility and, as a practical matter, this condition cannot possibly be satisfied in the timeframe of the revised offer, if at all.

4) The revised Onex/AMR offer would continue to add $544 million of additional Airco debt to Air Canada`s balance sheet.

“There is little incremental value added by the revised Onex offer, while Onex would have the market believe that its price has gone up by $4.50. This kind of meaningless change, through a highly conditional bid, is another attempt to mislead the market,” said Robert Milton, President and Chief Executive Officer. “Air Canada will complete a detailed review of the new Onex/AMR offer, and will advise shareholders later today regarding its Board`s position on the new offer and any response that Air Canada may make.”

In response to comments made by Mr. Gerald Schwartz, on a teleconference call earlier today, relating to one of the conditions of the share buyback offer, Air Canada states that this condition is a customary condition typically found in share buy back offers for tax reasons. Mr. Schwartz`s comments are completely unfounded and Air Canada fully expects this condition to be fulfilled.

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