MONTREAL, July 24 /CNW Telbec/ - The Minister of Finance advised Air
Canada earlier today that a regulation has been approved that amends Air
Canada's pension funding obligations to allow for a moratorium on past service
contributions for a 21-month period and fixed payments thereafter for the
2011-2013 period. This follows on the ratification of pension funding
agreements by all five of Air Canada's Canadian-based unions and the
successful conclusion of a consultation process with its retirees, managers
and administrative, technical and support employees (AT&S) for these same
pension funding arrangements.
    "This is an extremely important milestone. Achieving an alternative
pension funding solution that defers deficit funding in this environment is a
major achievement and an important step forward towards stabilizing the
company," said Calin Rovinescu, President and CEO, Air Canada. "In this tight
credit market, the securing of new financing to meet liquidity requirements
over the medium term remains our next major challenge. If that is achieved we
will then be better positioned to manage through this period of global
economic weakness and significantly lower airline revenues. An unrelenting and
disciplined focus on cost management and a new approach to revenue generation
will be key to our success in returning Air Canada to profitability."
    The Company 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 agreements remain subject to Air Canada
entering into agreements to raise a minimum of $600 million in new financing.

    CAUTION REGARDING 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