Bilateral partnership includes reciprocal benefits for Aeroplan and
    Fedilidade members, as TAM prepares to join Star Alliance

    SAO PAULO, Brazil, Oct. 7 /CNW Telbec/ - Air Canada (TSX: AC-A.TO,
AC-B.TO), a founding member of Star Alliance, and TAM (Bovespa: TAMM4 and
NYSE: TAM), Brazil's largest airline, today announced they have concluded an
agreement to expand their networks on a codeshare basis, offering customers
more choice of destinations and convenient transfers to major cities
throughout Brazil and Canada. This bilateral agreement also provides for
reciprocal travel reward benefits for the members of the carriers' frequent
flyer programs, Aeroplan and TAM Fidelidade. The introduction of codeshare
services and reciprocal travel reward benefits is planned to take effect
November 2008, subject to government approval.
    Separately, Star Alliance today announced that following the successful
conclusion of membership talks with TAM, the Chief Executive Board of Star
Alliance has voted to accept Latin America's largest air carrier as a future
member.
    "Air Canada is pleased to take these initial steps towards a stronger
relationship with our partner TAM, Brazil's leading airline and Latin
America's largest carrier, that will benefit the customers of both airlines by
offering easier access to the most popular destinations in Brazil, Canada and
beyond," said Montie Brewer, Air Canada's President and Chief Executive
Officer, in Sao Paulo for the announcement that TAM has been invited to become
a future Star Alliance member. "As a founding member of Star Alliance, we have
seen the enormous benefits that the Alliance has brought to international
travellers in terms of simplifying the travel experience, and providing more
choice to connect the world more easily. We look forward to welcoming TAM as a
Star Alliance member and offering an expanded range of benefits that our
customers value most."
    With the implementation of this new bilateral partnership agreement
between Air Canada and TAM, customers of both airlines will benefit from
simplified bookings, seamless connections on a single ticket and baggage
check-through to final destination. Through connections at Sao Paulo Guarulhos
International Airport, Air Canada's network will expand to serve six major
Brazilian cities on a codeshare basis operated by TAM: Rio de Janeiro,
Salvador, Recife, Belo Horizonte, Curitiba and Porto Alegre. TAM customers in
turn, will benefit from an expanded network including daily codeshare service
operated by Air Canada between Sao Paulo and Toronto with convenient
connections in Toronto to: Vancouver, Calgary, Edmonton, Winnipeg, Montreal
and Quebec City.
    According to David Barioni, TAM's President, the agreement with Air
Canada contributes to the company's strategy to expand their operations abroad
as one of the major airline companies in the world. "We are committed to
offering our clients high quality services compatible with international
standards, within the three pillars our operation is based upon: excellence in
services, excellence in technical operation and excellence in management,"
said Mr. Barioni.
    Between Toronto and Sao Paulo, Air Canada operates year-round daily
non-stop service with 211-seat Boeing 767-300ER aircraft, replaced with a
larger 349-seat Boeing 777-300ER during the peak travel months December to
March. Air Canada's new in-flight product features lie-flat beds in its
international business class cabin, Executive First, and digital quality
seatback entertainment on demand for all customers - on international as well
as shorter North American flights, in both economy and business class.
    Paulo Castello Branco, TAM's Vice President, Commercial and Planning,
adds: "The agreement with Air Canada reinforces our strategy to establish
partnerships with major airlines worldwide and allows us to offer our clients
a broader range of destinations in North America."

    About TAM - TAM Airlines (www.tam.com.br) has been the domestic market
leader since July of 2003, and closed last May 2008 with 49.3% of market
share. The company flies to 42 destinations in Brazil. With business
agreements signed with regional companies, it reaches 79 different
destinations in the country. TAM's market share among Brazilian companies that
operate international flights stood at 74.3% in May. Operations abroad include
TAM flights to 16 destinations in the United States, Europe and South America:
New York and Miami (USA), Paris (France), London (England), Milan (Italy),
Frankfurt (Germany), Madrid (Spain), Buenos Aires and Csrdoba (Argentina),
Santa Cruz de la Sierra (Bolivia), Santiago (Chile), Asuncion and Ciudad del
Este (Paraguay), Montevideo and Punta del Este (Uruguay), and Caracas
(Venezuela). It has code-share agreements that make possible the sharing of
seats on flights with international airlines, enabling passengers to travel to
64 other destinations in the U.S., Europe and South America.

    About Air Canada - Montreal-based Air Canada provides scheduled and
charter air transportation for passengers and cargo to more than 170
destinations on five continents. Canada's flag carrier is the 14th largest
commercial airline in the world and serves 33 million customers annually with
a fleet consisting of 335 aircraft. Air Canada is a founding member of Star
Alliance, providing the world's most comprehensive air transportation network.
    Air Canada was ranked in 2007 as the "Best Airline in North America" for
the second time in three years in an independent passenger survey of 14
million air travellers conducted by Skytrax. In addition, Air Canada was
recently voted 'Best Airline in North America' and 'Best Airline in Canada' by
the readers of Global Traveler magazine, and 'Best Business Class to Canada'
by the readers of Business Traveler magazine. In 2007, Air Canada was
recognized by the editors of Air Transport World as the airline industry
leader in market innovation, specifically Air Canada's success in implementing
an innovative and transparent pricing structure, its effectiveness in using
online technology to meet consumers' needs and its fleet-wide renewal with a
consistent, market-leading onboard product among North American airlines.