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New Low Fare, High Value Airline to Zip Into Western Canada This Summer

ZIP responds to changing airline marketplace - growing demand for high
value, low fares

CALGARY, Alberta, April 19 /CNW/ - Air travellers will soon have a new
choice for high value, low fare air travel, with the announcement today that
ZIP (ZIP Air Inc.) will launch service in Western Canada this summer. A wholly
owned subsidiary of Air Canada, headquartered in Calgary, ZIP will offer low
fares, a convenient schedule and friendly, professional service. This will be
teamed with Air Canada's outstanding maintenance, safety standards and the
Aeroplan Reward Program.
"The announcement of ZIP speaks to a growing number of consumers who are
asking for more options in low fare, reliable air service," said Steve Smith,
President and Chief Executive Officer of ZIP. "ZIP responds directly to
fundamental changes in the airline industry, especially on short haul routes
where fewer consumers are looking for Executive Class and meals, but all are
looking for low fares and friendly, professional service."

ZIP'S NETWORK AND AIRCRAFT
ZIP will initiate operations between Vancouver and Calgary, replacing
existing Air Canada network flights without changing the number of
frequencies. Within its first year of operations, ZIP will grow to serve
additional markets across Canada and into the United States.
ZIP's start-up fleet will consist of six Boeing 737-200 aircraft, and
will eventually grow to twenty 737-200s, all transferred from the existing Air
Canada mainline fleet. ZIP will operate primarily short haul routes with
connections to and from Air Canada's worldwide network.

ZIP STYLE
ZIP's signature look - a full, vibrant, four-colour palette with a
prominent white logo - was unveiled today, including a model B-737 in fuchsia
livery and aircraft images in ZIP's colours: fuchsia, blue, green and orange.
"We have specifically chosen a very distinctive look for ZIP that reflects the
unique character we will bring into the marketplace, one of ease, confidence
and convenience coupled with value and low fares," added Steve.

BUYING AND FLYING WITH ZIP
The airline will announce schedules, fares and the commencement date for
ticket sales at a later date.
Customers will be able to book travel on ZIP online at www.4321zip.com,
through a toll-free call centre or through travel agents. ZIP will offer
electronic ticketing and check in at Air Canada's Express Check-In kiosks.
Onboard, customers will enjoy generous legroom, ample storage space and a
complimentary light snack and beverage service. ZIP will offer convenient
connections to the Air Canada worldwide network. All ZIP flights will qualify
for Aeroplan mileage accumulation and redemption for reward travel.

THE ZIP TEAM AND AIR CANADA
ZIP's operating certificate, licenses, management team and corporate
identity will be independent of Air Canada. ZIP staff will manage the
airline's operations from its Calgary headquarters and network locations. ZIP
will operate with a dedicated team of customer contact people, including
flight attendants, reservation agents and, in certain cities, passenger
agents.
ZIP will contract with Air Canada and Air Canada Jazz, for the provision
of certain operational services and resources, including pilots for ZIP
flights and the maintenance of the ZIP fleet, at commercial market rates.

ZIP'S CALGARY HEADQUARTERS
With its headquarters in Calgary, ZIP is well positioned to take
advantage of Calgary's strengths: its strategic location as a major North
American transportation and logistics hub; the city's entrepreneurial approach
to business, and the Calgary International Airport's ongoing customer service
upgrades and expansion. ZIP's headquarters offices will be located within
existing Air Canada office and hangar space near the airport.

ZIP AT A GLANCE
---------------

ZIP Air Inc. (ZIP) is a wholly owned subsidiary of Air Canada, which will
launch this summer.

ZIP WILL OFFER
--------------
- Competitive, low fares
- Convenient schedules
- Comfortable, reliable aircraft
- Friendly, professional service
- Electronic ticketing
- Ample overhead storage space
- Comfortable seat pitch
- Complimentary on-board beverage and light snack service
- Aeroplan Reward Program
- Convenient connections to Air Canada's worldwide network
- Automated check-in kiosks
- A wide range of options for bookings including:
- Over the Internet
- With the ZIP call centre, or
- Through a travel agency

PLUS:
-----
- ZIP will also be built on Air Canada's extensive experience in
maintenance and flight operations. ZIP will subcontract the
maintenance of its fleet to Air Canada, at commercial market rates,
and will use Air Canada pilots.
- ZIP will operate independently with its own:
- Management team
- Headquarters in Calgary
- Corporate brand and identity
- Operating certificate and licenses

ZIP PEOPLE
----------
Initially 250 people will be part of the ZIP team, based in Calgary and
in Vancouver, with plans to eventually staff up to 1000 employees.
Oh, and...ZIP's hiring. Check out the Web site for details.

www.4321ZIP.com
---------------
That's it - please visit often.

ZIP PLACES
----------
ZIP will initiate operations between Vancouver and Calgary replacing
existing Air Canada network flights without changing the number of
frequencies. Within its first year of operations, ZIP will grow to serve
additional markets across Canada and into the United States.
ZIP will operate primarily short haul routes with connections to and from
the Air Canada worldwide network.

ZIP AIRCRAFT
------------
ZIP will commence operations with six Boeing 737-200 aircraft in a 117
seat, all-Hospitality configuration, with an eventual fleet of 20 aircraft.
The entire ZIP fleet will be transferred from the existing Air Canada mainline
fleet.

MORE ABOUT ZIP
--------------
Future announcements will include details on ZIP's plans for hiring,
fares, flight schedules, first date of ticket sales and more.

Stay tuned!

ZIP QUESTIONS?
--------------
Patricia Misutka
ZIP Corporate Communications
Phone: (604) 276-4959
Cell: (604) 788-3481
Email: [email protected]

AND SOME MORE ABOUT ZIP

WHY ZIP?
--------
Canadians have told Air Canada that they want the airline to continue
serving their communities, but the airline's mainline operations in certain
short haul markets may no longer be financially sustainable. Low fare air
service is a market segment that is growing and is ideally suited to a low
fare carrier, which by definition has lower costs and is better able to
respond to growing consumer demands.

ZIP will be able to take costs out by:
- Offering complimentary light snack and beverage service only
- Ensuring maximum use of electronic services from online booking to
self-serve electronic check-in
- Configuring all planes in all Hospitality seating with enhanced seat
pitch
- Lowering labour costs
- Benefitting from synergies and efficiencies that result from operating
only one type of aircraft, the Boeing 737-200

The launch of ZIP is Air Canada's answer to new market realities and a
critical component of its strategy to dramatically reduce its costs. It is
also consistent with the primary goal of its business plan to return to
profitability, to the benefit of customers, employees and shareholders.

WHY NOW?
--------
In Canada, consumers are asking not just for more low fare service, but
for more low fare service from Air Canada. In an Ipsos Reid survey conducted
between November 30 and December 6, 2001, 61 per cent of Canadians indicated
that not enough low-fare carriers operate in the domestic market and 82 per
cent of Canadians indicated they would fly a low-fare, no-frills airline
affiliated with Air Canada.
The time is right for ZIP, a new low fare airline that will provide an
attractive, affordable service alternative, while offering connections to Air
Canada's worldwide network.

ZIP'S WINGS
-----------
ZIP will fly some of the newest B737-200 aircraft in service. The B-737-
200 is the most suitable aircraft for the routes ZIP will fly. The Boeing 737-
200 fleet has been maintained with the highest maintenance standards and will
continue to be maintained by Air Canada.
The Boeing 737 series is the best-selling jetliner of all time. 737s have
carried the equivalent of the world's population - about 6.1 billion
passengers.

ZIP STYLE
---------
ZIP has a distinct "style". The company has designed its image to convey
the type of company the airline plans to be. ZIP is:
- friendly, confident and professional
- memorable, like its short, catchy name
- confident and bright, like its bold four-colour palette

OK...WHAT'S WITH THE BEE?
-------------------------
People will notice. ZIP has a bee on all of its planes. A bee was chosen
as a flying companion because of its outstanding characteristics. Bees are:

- industrious
- great producers
- harmonious team players
- resourceful
- intuitive

It's a great symbol for a hard-working airline with a goal of making
flying easy.

GETTING THE ZIP TEAM IN PLACE
-----------------------------
The airline is now recruiting members for the ZIP team. Interested
applicants can visit the ZIP Web site at www.4321zip.com starting April 19,
2002.

NEED MORE ZIP?
--------------
For more information, to arrange interviews or request visuals, please
contact:

Patricia Misutka
ZIP Corporate Communications
Phone: (604) 276-4959
Cell: (604) 788-3481
[email protected]

ATTENTION PHOTO EDITORS: A selection of high resolution, downloadable
ZIP aircraft images are available at www.4321zip.com .