Air Canada Premier Airline in Canada

Air Canada Maintains and Strengthens Position in all Markets AC Other AC Other 2001 results based on start of the year. Estimated market share results based on OAG Q scheduled airline capacity share, published December, % 14% 78% 16% 40% 10% 55% 12% 38% 11% 47% 15% 42% 13% 49% 25%

Q401: Encouraging Performance Despite Loss (millions) Q4Q4 Change Oper. Revenue$2,117$2,590$(473) Oper. Expense2,4252,985(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 Q1Q2Q3Q4 AC US

Air Canadas 4 th Quarter RASM Outperforms Industry * Source ATA 2001/2000 % Change Q1Q2Q3Q4 AC US

Unit Cost* Performance Outpaces Industry Throughout 2001 * adjusted for one-timers – US industry = 6 majors Q1Q2Q3Q4 AC US /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 CanadaCanadian Maintenance and RampJune Flight AttendantsOct. 2001June 2004 PilotsApr Customer Sales & ServiceMar

Future Labor Cost Much Lower Than U.S. Carriers Maintenance and Ramp2.5% 2.5% 2.5% Flight Attendants--- Pilots 2.5% 2.5%- Customer Sales & Service 2.5% 2.5%- Air Canada

Favorable Competitive Landscape ServiceCompetitor Reductions Trans AtlanticCancellations: Virgin Toronto-London Sabena Montreal-Brussels Trans PacificReductions: Numerous carriers reduced service via U.S. EVATaiwan-Canada

Favorable Competitive Landscape ServiceCompetitor Reductions DomesticCanada 3000 ceases operations Nov/09 Transborder Cancellations: USA AA Boston-Halifax/Montreal/Ottawa UA Toronto-Denver USAir Toronto-Indianapolis Canada 3000Toronto-Newark, Los Angeles- Vancouver/Edmonton/Calgary/ Toronto Reductions: Chicago, LaGuardia, Denver, San Francisco, Seattle, Portland, Los Angeles, Houston, Cleveland, Indianapolis, Baltimore

Air Canadas Action Plan Launch new products Reduce capacity Renew fleet Lower unit costs Lower manpower levels

Air Canadas 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 Canadas Products

Low fare Lower cost Supplemental flying in key markets Sun, long haul domestic, transcontinental routes Distinct brand Air Canada code

Air Canadas Products Specialty charter Executive First configuration of surplus B-737 Focus on specialty charters (i.e. sports teams, etc.) Concierge service

Air Canadas Products Leisure, low yield Low cost Point-to-point, short haul Domestic/Transborder Distinct brand Unique code* * Air Canada codeshare

% Change in ASMs Capacity Discipline Q1Q2Q3Q4Q1Q2Q3Q

Smaller / Younger FleetChange Dec / 00Dec / 0101/00Dec/0202/ / / /320/ DC CRJ Total Mainline Regional TOTAL

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 2000Q2 2001Q 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 A A A A Total146

Low Cap Ex in 2002 ($ millions) Aircraft$602 Financing(658) Net$(56) Other203 Total Mainline$147 Subs15 Total$162

Significant Value in Air Canadas 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 Canadas 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.