MONTREAL, July 15 /CNW Telbec/ - Air Canada provided the following
comment today in response to receiving confirmation from the IAMAW that its
members have ratified their tentative agreements on labour stability and
pension funding relief. This successfully concludes the ratification process
by all five of Air Canada's Canadian based unions.
    "The successful conclusion of the ratification process represents an
important milestone in achieving the stability required to manage through this
difficult economic period," said Calin Rovinescu, President and CEO of Air
Canada. "It is an encouraging sign of our employees' support for working
together to build a stronger business in the current economic context. I
commend the union leadership and Air Canada management teams involved in the
process for their hard work and professionalism, and extend a special
appreciation to the Honourable James Farley Q.C. for his contribution.
    "These are extremely challenging times for both the airline industry and
credit markets and there remain many hurdles to overcome, including the
necessary governmental approvals for the pension funding arrangement and
securing new financing to meet our immediate liquidity requirements. If that
is achieved, to return Air Canada to profitability will require a fundamental
restructuring of our business. This will include the execution of a
disciplined and significant cost reduction program requiring participation by
certain suppliers and stakeholders, as well as new revenue generation
initiatives. At the same time we will remain focused on re-engaging our
customers and ensuring that we do not concede market share to our competitors
without looking for value added ways to preserve it," concluded Mr. Rovinescu.
    The Company has concluded comprehensive labour agreements on a cost
neutral basis for 21 months with its entire unionized workforce in Canada, in
addition to a pension funding moratorium. The terms of the labour contract
extension agreement specify that there shall be no changes to wage rates and
pension benefit levels during the extension period.
    The agreements remain subject to the adoption by the Federal Government
of an Order-in-Council amending Air Canada's pension funding rules and Air
Canada raising a minimum of $600 million in new financing. The pension funding
agreements are also subject to the support of the company's non-unionized
employees and retirees. A consultation process with these groups is currently
under way and is expected to be concluded by July 18, 2009.

    The five unions representing Air Canada's Canadian-based employees are:
the IAMAW representing approximately 12,300 Technical, Maintenance and
Operational Support, Clerical and Finance Employees, ACPA representing
approximately 3,200 pilots, CUPE representing approximately 6,700 flight
attendants, CAW Local 2002 representing approximately 4,100 Customer Service
and Sales agents and CALDA representing approximately 70 flight dispatchers.

    Forward Looking Information

    Air Canada's public communications may include written or oral
forward-looking statements within the meaning of applicable securities laws.
Forward-looking statements, by their nature, are based on assumptions and are
subject to important risks and uncertainties. Any forecasts or forward-looking
predictions or statements cannot be relied upon due to, amongst other things,
changing external events and general uncertainties of the business. Actual
results may differ materially from results indicated in forward-looking
statements due to a number of factors, including without limitation, industry,
market, credit and economic conditions, the ability to reduce operating costs
and secure financing, pension issues, energy prices, currency exchange and
interest rates, employee and labour relations, competition, war, terrorist
acts, epidemic diseases, insurance issues and costs, changes in demand due to
the seasonal nature of the business, supply issues, changes in laws,
regulatory developments or proceedings, pending and future litigation and
actions by third parties as well as the factors identified throughout Air
Canada's public disclosure file available at www.sedar.com. The
forward-looking statements contained in this news release represent Air
Canada's expectations as of the date of this news release and are subject to
change after such date. However, 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.
    %SEDAR: 00001324EF