July 24, 2008

Air Canada Builds Partnership With Continental Airlines to Provide Expanded Network, Frequent Flyer Benefits and Lounge Access

MONTREAL, July 24 /PRNewswire-FirstCall/ -- Air Canada today announced that it has reached an agreement in principle with Continental Airlines, the fourth largest carrier in the United States, to provide customers an enhanced travel experience through access to a broader network and seamless services provided in cooperation by the two carriers.

"This is an exciting opportunity for Air Canada and Continental Airlines to develop a deeper relationship that will be of great benefit to our customers," said Ben Smith, Executive Vice President and Chief Commercial Officer. "Through cooperation with Continental, including a proposed codesharing arrangement, we will be able to offer customers traveling to the United States a vast array of enhanced travel benefits including more choice of destinations, new routings, expanded frequent flyer benefits and lounge access for eligible customers. At the same time, we will be able to realize greater efficiencies so we can compete more effectively. It is one of the many innovative ways we are responding to the high cost of fuel, by working with alliance partners for the benefit of our customers."

Air Canada and Continental intend, subject to obtaining regulatory approvals, to offer customers coordinated services and enhanced product offerings through codeshare, frequent flyer and lounge access agreements. Through Continental's hubs in Newark and Cleveland, Air Canada will offer more options to the eastern United States, and through Continental's Houston hub, greater access to the southern United States, Mexico and Central America. Air Canada's proposed alliance with Continental will give customers an expanded network that complements Air Canada's existing North American network with its Star Alliance partner, United Airlines. In June, Continental announced that it also plans to join Star Alliance.

In addition, Air Canada has also signed a multi-lateral framework agreement with Continental, United Airlines, and Lufthansa to create a transatlantic joint venture through which the carriers intend to provide customers with more choice and streamlined service to Africa, India, Europe and the Middle East. As a first step, nine Star Alliance carriers, including Air Canada, have filed a joint application with the U.S. Department of Transportation to add Continental Airlines to their existing antitrust immunity.


This disclosure may include forward-looking statements within the meaning of applicable securities laws. Forward-looking statements are based on assumptions, are subject to important risks and uncertainties and cannot be relied upon due to, amongst other things, changing external factors and general uncertainties of the business. Results indicated in forward-looking statements may differ materially from actual results due to a number of factors, including without limitation, energy prices, general industry, market and economic conditions, currency exchange and interest rates, competition, war, terrorist acts, epidemic diseases, insurance issues and costs, changes in demand due to the seasonal nature of the business, the ability to reduce operating costs, employee and labour relations, pension issues, supply issues, changes in laws, regulatory developments or proceedings, pending and future litigation and actions by third parties, as well as the factors (including assumptions) identified in Air Canada's public disclosure file and accessible through SEDAR at http://www.sedar.com/. Any forward-looking statements contained in this disclosure represent Air Canada's expectations as of the date of this disclosure and are subject to change after such date. Air Canada disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required under applicable securities regulations.


CONTACT: Isabelle Arthur (Montreal), (514) 422-5788; Peter Fitzpatrick(Toronto), (416) 263-5576; Angela Mah (Vancouver), (604) 270-5741;aircanada.com