Investor Presentaiton

- 18- Air Canada recognizes the need to continually stay competitive by offering customers an enhanced flight experience. In addition to acquiring new aircraft, Air Canada commenced a major refurbishment of the interior of its existing aircraft in 2006. All existing aircraft, except for the Airbus A340 aircraft, will have refurbished interiors, including new seats and personal in-flight entertainment systems and in-seat power outlets at every seat in Economy Class and Executive Class. For aircraft that will be flying international routes, seats in the Executive Class cabin will also convert into lie-flat beds. As of March 27, 2007, Air Canada has completed the refurbishment of 23 Airbus A320 aircraft, five Boeing 767-300 aircraft and two Airbus A319 aircraft. The new Embraer and Boeing 777 aircraft are being delivered with the new seats and entertainment systems already installed. The aircraft refurbishment process is scheduled to be completed by the middle of 2008. Leveraging Technology for Enhanced Customer Service and Cost Containment In order to support the rapid and efficient implementation of Air Canada's revenue model and to reduce transaction and distribution costs, Air Canada is developing a new web-enabled computer system to replace Air Canada's legacy systems for passenger reservation and airport customer service. Named POLARIS, this state-of-the-art new system is expected to be deployed in a phased manner commencing from late 2007 and running through a major part of 2008. The new technology is expected to be innovative, flexible and cost effective and will allow Air Canada to facilitate and streamline the reservation and travel processes for both its customers and employees. Air Canada's objective is to allow all travel transactions to be completed via Air Canada's websites, kiosks, personal handheld devices or other web- enabled platforms. The principal design focus is to create a platform that allows customers to complete any transaction required at any moment of their travel experience. Continue to Improve its Cost Structure Air Canada's business strategy is focused on continuously evaluating and improving its cost structure to remain highly competitive. Air Canada's fleet renewal program will provide cost efficiencies; the Embraer ERJ-190 aircraft generates 18% lower trip costs as compared to the Airbus 319 aircraft. Improved technology used by Boeing in its 777 and 787 aircraft is expected to generate lower fuel-burn rates for airlines. Air Canada expects the Boeing 777-300 to be 26% more efficient on a unit cost basis as compared to the Airbus 340-500 while the Boeing 787-8 is expected to be 30% more efficient on a unit cost basis for fuel and maintenance than the Boeing 767-300. At the same time, POLARIS is expected to improve efficiencies in call centers, airport check-in and revenue accounting. Maintaining Positive Employee and Labour Relations As part of its focus on employee relations, Air Canada is committed to communicating with its employees in an open and transparent manner and to providing them with the tools they need to do their jobs. Air Canada is acting on this commitment by training managers to help them create and promote meaningful and positive employee relations and by providing its employees with increased opportunities for dialogue and feedback. As part of this commitment, in January 2007, Air Canada launched a leadership and employee relationship training initiative for all management employees entitled "Relationship Matters". Air Canada is focused on maintaining a cooperative relationship with its unions. Air Canada and some of its unions have also introduced new grievance procedures that provide for expedited resolution of grievances and are designed to facilitate the labour-management relationship and increase accountability on both sides.

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