1. Third Quarter 2002 October 25, 2002 Note to Internet viewers: Please use “NOTES PAGES” view to access all notes and text.

2. Agenda - 3rd Quarter Highlights Economic Environment Operating Statistics Competitive Environment Revenue Highlights Income Highlights

3. 3rd Quarter Results Air Canada records only profit among major international carriers in North America Operating results improve by $226 million or $63 million excluding the estimated impact of Sept. 11 on Q3 2001 results Operations generate $89 million in cash Yield posts growth after six consecutive quarters of declines Increased productivity and lower unit costs continue to underlie higher profitability - Q3 2001 also severely affected by Sept. 11 Aircraft flying hours reduced by 3.5% while available seat miles rose 2.5%

4. 3rd Quarter Results Mainline scheduled load factor up 1.0 PP over adjusted Q3 2001 Manpower level down 2,218 or 5.9% from Q3 2001 Employee productivity up 4% over adjusted Q3 2001 Fuel price per litre down 11% Net unit cost down 3.2% over adjusted Q3 2001

5. 3rd Quarter Results Quarter end cash of $0.7 billion Cash and committed financing total $0.9 billion $346 million in long-term debt repaid Additionally, $142 million of Air Canada’s yen perpetual debt purchased for $50 million and gain of $92 million $143 million in sale/leaseback proceeds primarily from two CRJs and 11 engines

6. Q3 Stats At a Glance (Unadjusted Q3’01) Mainline Operations (Scheduled)

7. Q3 Stats At a Glance (Q3’01, adjusted for Sept. 11 impact) Mainline Operations (Scheduled)

8. Operating Income Improves By $226 Million

9. Operating Income Improves By $63 Million Over Q3 2001 Results (Adjusted for impact of Sept. 11)

10. Q3 Net Interest Exp. Improves $14 Million

11. Disciplined Capacity Pushes Load Factor Up Mainline Operating Statistics (Scheduled) *Adjusted for Sept. 11

12. Disciplined Capacity Throughout but U.S. Reductions Accelerate (Y-O-Y Changes in Mainline Capacity) % Change in ASMs

13. Atlantic & Pacific Markets Maintain Strong Traffic Growth (Y-O-Y Changes in Mainline Traffic) % Change in RPMs

14. System Yield Stabilizes After Six Quarters Of Decline (Y-O-Y Changes in Mainline Passenger Yield) % Change in Yield

15. RASM Lifts On Very Strong Atlantic & Pacific Performance (Y-O-Y Changes in Mainline Revenue per ASM) % Change in RASM

16. Q3 Revenue Marginally Down As Weak U.S. Offsets Domestic & International Strength (Y-O-Y Changes in Mainline Passenger Revenue) % Change in Revenue

17. Increased Yield Lifts Domestic RASM (Adj. Q3’01) J&A’01 Q4’01 Q1’02 Q2’02 Q3’02 Capacity - Canada (Y-O-Y Changes in Capacity) % Change in ASMs Yield - Canada (Y-O-Y Changes in Passenger Yield) RASM - Canada (Y-O-Y Changes in Revenue per ASM) Load Factor- Canada (Y-O-Y Changes in Load Factor) % Change in RASM PP Change in Load Factor % Change in Yield J&A’01 Q4’01 Q1’02 Q2’02 Q3’02

18. U.S. RASM Down On Weak Pricing (Adj. Q3’01) J&A’01 Q4’01 Q1’02 Q2’02 Q3’02 Capacity - Transborder (Y-O-Y Changes in Capacity) % Change in ASMs Yield - Transborder (Y-O-Y Changes in Passenger Yield) RASM - Transborder (Y-O-Y Changes in Revenue per ASM) Load Factor- Transborder (Y-O-Y Changes in Load Factor) % Change in RASM PP Change in Load Factor % Change in Yield J&A’01 Q4’01 Q1’02 Q2’02 Q3’02

19. Other Int’l RASM Up On Higher Load Factor And Yield (Adj. Q3’01) J&A’01 Q4’01 Q1’02 Q2’02 Q3’02 Capacity - Other Int’l (Y-O-Y Changes in Capacity) % Change in ASMs Yield - Other Int’l (Y-O-Y Changes in Passenger Yield) RASM - Other Int’l (Y-O-Y Changes in Revenue per ASM) Load Factor- Other Int’l (Y-O-Y Changes in Load Factor) % Change in RASM PP Change in Load Factor % Change in Yield J&A’01 Q4’01 Q1’02 Q2’02 Q3’02

20. System RASM Up On Higher Load Factor And Stable Yield (Adj. Q3’01) J&A’01 Q4’01 Q1’02 Q2’02 Q3’02 Capacity - Total (Y-O-Y Changes in Capacity) % Change in ASMs Yield - Total (Y-O-Y Changes in Passenger Yield) RASM - Total (Y-O-Y Changes in Revenue per ASM) Load Factor- Total (Y-O-Y Changes in Load Factor) % Change in RASM PP Change in Load Factor % Change in Yield J&A’01 Q4’01 Q1’02 Q2’02 Q3’02

21. Declining Unit Cost Still Drives Increased Profits But Also Aided By Stronger RASM (Adj. Q3’01) J&A’01 Q4’01 Q1’02 Q2’02 Q3’02 Canada RASM % Change Y-O-Y Other Int’l RASM Total System USA RASM % Change Y-O-Y J&A’01 Q4’01 Q1’02 Q2’02 Q3’02

22. Air Canada Continues to Record The Best Traffic Results Of Any Major N.A. Carrier (Unadjusted Q3’01) (Y-O-Y Traffic Change) % Change in RPMs

23. Salaries & Wages: Manpower level down sharply; average salary & benefits cost up (Air Canada - Mainline) *Adjusted

24. Average Salary Up 6.6%, Employee Levels Down 5.9% (Y-O-Y Change - Total Salaries * & Employees*) *Mainline % Change Y-O-Y

25. Fuel: Price still sharply down (Air Canada - Mainline) *Adjusted

26. Mainline Cost Per Litre Down 11% While Productivity Up 4.4% (Fuel Productivity* & Unit Cost*) *Mainline % Change Y-O-Y

27. All Expense Categories Down except Aircraft Rent, User Fees and Other *Mainline, ‘01 adjusted for Sept. 11 % Change Y-O-Y Q3 2002/2001 RPMs ASMs COMM. FOOD & BAR A/C MTCE USER FEES A/C RENT OTHER DEP.

28. Q3 Net Unit Cost Down 3.2% (Cost Per ASM*) *Mainline, adjusted for non-ASM revenue, ‘01 adjusted for Sept. 11 % Change Y-O-Y

29. Fuel a Major Component Of Net CASM* Improvement Of 3.2% *Mainline LabourFuel Unit cost decrease net of non-ASM revenue Other Effect of non-ASM revenue

30. Air Canada Has Lowest Net Unit Cost Of N.A. Majors *Adjusted for non-ASM producing activity. ** Not adjusted for Sept. 11 (Unit Cost* per ASM - Q3‘02 & Q3‘01**) U.S. cents

31. Balance Sheet - Liquidity is Good (Air Canada - Consolidated) NM - not meaningful