MONTREAL, July 24 /CNW Telbec/ - 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.

    CAUTION REGARDING FORWARD-LOOKING INFORMATION

    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 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.
    %SEDAR: 00001324EF