From the restructuring bulletin:

Fleet growth opportunities

The Company continues to actively look for win/win opportunities to expand our international flying. As we have seen over recent months, we have successfully launched or re-launched routes to Buenos Aires, Santiago, Delhi, Havana and San Jose, Costa Rica. These routes have shown positive early results and have provided Air Canada and our people with unique opportunities for growth. Over the months ahead, we are determined to continue maximizing our international route rights and growing our route network worldwide.

With this in mind, we now have an opportunity to acquire two Airbus A340-500 ultra-longhaul aircraft that were originally slated to be delivered last year, but did not occur as a result of our CCAA filing. In the current CCAA environment, however, a number of contractual considerations must be negotiated between the company and ACPA so that an attractive business case can be developed to obtain the support of the Board of Directors, the Monitor, the equity plan sponsor, the creditors, and the Court to permit the entry of these aircraft into our fleet.

The A340-500 is capable of operating markets such as Toronto-Hong Kong, Vancouver-Sydney, or Toronto-Delhi on a non-stop basis year round. The operation of these aircraft would involve the employment of approximately 65 additional pilots and 200 additional flight attendants as well as lead to the preservation/creation of other jobs throughout the corporation. Hopefully discussions to acquire these aircraft will be successful by Tuesday, February 24, 2004, as there has been much market speculation that if Air Canada does not commit to these aircraft in the coming days they will be placed with a Middle-Eastern carrier.

In the interests of transparency and to permit open and frank negotiations, the Company will look to conduct these negotiations in an open forum. Furthermore, the Company will also seek to conduct this and any future negotiations with all unions in the same fashion.

By working together, we can create new opportunities to benefit our employees and all our stakeholders. Further updates on these negotiations will be communicated as developments warrant. The Company’s request to ACPA will be available for review on achorizons.ca and Aeronet under Restructuring.


Employee Communications YULNNAC
Restructuring is on Aeronet, www.achorizons.ca, and in CIC*98/22.
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