Air Canada Premier Airline in Canada

Air Canada Maintains and Strengthens Position in all Markets

ACOther

ACOther

2001 results based on start of the year. Estimated market share.

2002 results based on OAG Q1 2002 scheduled airline capacity share, published December, 2001

73%

14%

78%

16%

40%

10%

55%

12%

38%

11%

47%

15%

42%

13%

49%

25%

Q4’01: Encouraging Performance Despite Loss

2001 2000 (millions) Q4 Q4 Change

Oper. Revenue $ 2,117 $ 2,590 $ (473)

Oper. Expense 2,425 2,985 (560)

Oper. Income (Loss) (308) (395) 87

Non-oper. Expense (82) (84) 2

Income (Loss) Before Tax $ (390) $ (479) $ 89

* Pre-government assistance - US Industry = 6 majors

% Operating Margin

Best Operating Results* of any Major International Carrier in North America

Q1 Q2 Q3 Q4

ACUS0

-5

-10

-15

-20

-25

-30

Air Canada’s 4th Quarter RASM Outperforms Industry

* Source ATA

2001/2000% Change

Q1 Q2 Q3 Q4

ACUS5

0

-5

-10

-15

-20

-25

Unit Cost* Performance Outpaces Industry Throughout 2001

* adjusted for one-timers – US industry = 6 majors

Q1 Q2 Q3 Q4

ACUS

10

8

6

4

2

0

-2

-4

2001/2000% Change

More Air Canada Strengths

• Proven track record of superior service

• Top Brand recognition throughout Canada

• Labor contract stability

• Labor rates lower than U.S. carriers

Labor Contract Stability

Air Canada Canadian

Maintenance and Ramp June 2005 -

Flight Attendants Oct. 2001 June 2004

Pilots Apr. 2004 -

Customer Sales & Service Mar. 2004 -

Future Labor Cost Much Lower Than U.S. Carriers

2002 2003 2004

Maintenance and Ramp 2.5% 2.5% 2.5%

Flight Attendants - - -

Pilots 2.5% 2.5% -

Customer Sales & Service 2.5% 2.5% -

Air Canada

Favorable Competitive Landscape

Service Competitor Reductions

Trans Atlantic Cancellations:

Virgin Toronto-London

Sabena Montreal-Brussels

Trans Pacific Reductions:

Numerous carriers reduced

service via U.S.

EVA Taiwan-Canada

Favorable Competitive Landscape

Service Competitor Reductions

Domestic Canada 3000 ceases operations Nov/09

Transborder Cancellations:USA AA Boston-Halifax/Montreal/Ottawa

UA Toronto-DenverUSAir Toronto-IndianapolisCanada 3000 Toronto-Newark, Los Angeles-

Vancouver/Edmonton/Calgary/ Toronto

Reductions:Chicago, LaGuardia, Denver, San Francisco, Seattle, Portland, Los Angeles, Houston, Cleveland, Indianapolis, Baltimore

Air Canada’s Action Plan

• Launch new products

• Reduce capacity

• Renew fleet

• Lower unit costs

• Lower manpower levels

Air Canada’s Products

Air Canada’s Products

• “Air Canada”

• Hub – network

• Transborder and Domestic network

• Rapidair

• International

• Two-class

• Air Canada brand

• Air Canada code

• Key feed to mainline

• Regional markets

• Good frequency coverage

• Distinct brand

• Unique code*

* Air Canada codeshare

Air Canada’s Products

Air Canada’s Products

• Low fare

• Lower cost

• Supplemental flying in key markets

• Sun, long haul domestic, transcontinental routes

• Distinct brand

• Air Canada code

Air Canada’s Products

• Specialty charter

• Executive First configuration of surplus B-737

• Focus on specialty charters (i.e. sports teams, etc.)

• Concierge service

Air Canada’s Products

• Leisure, low yield

• Low cost

• Point-to-point, short haul

• Domestic/Transborder

• Distinct brand

• Unique code** Air Canada codeshare

% Change in ASM’s

2001 2002

Capacity Discipline

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

10

5

0

-5

-10

-15

-20

Smaller / Younger Fleet

Change ChangeDec / 00 Dec / 01 01/00 Dec/02 02/01

747 7 5 - 2 5 -330/340 16 20 + 4 16 - 4767-200/300 51 45 - 6 44 - 1319/320/321 82 85 + 3 104 +19737 43 26 -17 22 - 4DC9 17 4 -13 - - 4CRJ 25 25 - 25 -

Total Mainline 241 210 -31 216 + 6Regional 134 114 -20 105 -9

TOTAL 375 324 -51 321 -3

Lower Unit Costs

• Fleet reconfiguration

• Lower cost on-board product

• Increased distribution efficiencies

• Increased airport productivity

• Maintenance / fuel / real estate

Manpower Levels Coming Down

30,000

32,000

34,000

36,000

38,000

40,000

Q4 2000 Q2 2001 Q4 2001

Full Time Equivalents

Good Liquidity

• $1.2 billion in year-end 2001 cash

• Approximately $3.0 billion of unencumbered assets

– aircraft

– engines and spares

– inventory

– real estate

– lease deposit receivables

– accounts receivable

2002 Mainline Aircraft Deliveries

Sale/ Operating Leasebacks Leases

A340-500 2 -A321-200 7 -A319-100 5 3A320-200 - 3

Total 14 6

Low Cap Ex in 2002($ millions)

Aircraft $ 602Financing ( 658 )

Net $ ( 56 )Other 203

Total Mainline $ 147Subs 15

Total $ 162

Significant Value in Air Canada’s Business Units

Investment Considerations

• Commanding share of all markets served

• Solid hub and network strategy

• Traffic almost back to normal

• Pricing recovering

• Industry capacity rationalized

• Unit costs coming down

• Adequate liquidity

• Low capital expenses going forward

• Substantial business unit value

Caution Concerning Forward-looking Information:

Certain statements made in this presentation may be of a forward-looking nature and subject

to important risks and uncertainties. The results indicated in these statements could differ

materially from actual results for a number of reasons, including without limitation, general

industry, market and economic conditions, the ability to reduce operating costs and fully

integrate the operations of Canadian Airlines, employment relations, energy prices, currency

exchange rates, interest rates, changes in laws, adverse regulatory developments or

proceedings and pending litigation. Any forward-looking statements contained in this

presentation represent Air Canada’s expectations as of February 11, 2002 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.