Investor Presentaiton

- 46- Initial Public Offering Transactions On the closing of the Initial Public Offering, ACE indirectly transferred to Air Canada (i) all of its interest in Air Canada Ground Handling and all of its interest in Air Canada Ground Handling's general partner, and (ii) a 51% interest in Air Canada Vacations and a 51% interest in Air Canada Vacations' general partner. On the closing of the Initial Public Offering, ACE also transferred to Air Canada all of the shares of the general partner of Air Canada Cargo. Air Canada owns all of the limited partnership units of Air Canada Cargo and, as a result of such transfer, also owns all of the shares of the general partner of Air Canada Cargo. In addition, on the closing of the Initial Public Offering, ACE purchased from Air Canada the preferred limited partnership units of ACTS Holdco Limited Partnership held by Air Canada. For further details in respect of certain transactions entered into by Air Canada, ACE, ACTS and other affiliated entities with respect to the restructuring of the ACE group of entities in connection with Air Canada's Initial Public Offering, refer to subsection A entitled "Initial Public Offering" under Note 1 of Air Canada's combined consolidated financial statements for the year ended December 31, 2006, which subsection A of Note 1 is incorporated herein by reference. Air Canada's combined consolidated financial statements for the year ended December 31, 2006 are available on SEDAR at www.sedar.com. Structure Following the Initial Public Offering Prior to the closing of the Initial Public Offering, ACE held, directly or indirectly, a 100% interest in Air Canada. Following the closing of the Initial Public Offering, ACE owns, directly or indirectly, of record and beneficially 75% of Air Canada's outstanding Shares. See "Corporate Structure - Intercorporate Relationship" for a chart illustrating, on a simplified basis, the structure of Air Canada (including the jurisdictions of establishment/incorporation of the various entities) following completion of the closing of the Initial Public Offering. Independent Review Process Any material commercial transaction involving ACE or any of ACE's affiliates (other than Air Canada), on the one hand, and Air Canada, on the other hand, will be considered and approved by the directors of Air Canada who are independent of ACE as defined in National Policy 58-201 Corporate Governance Guidelines ("Independent") and who are not directors or officers of ACE or its subsidiaries (other than Air Canada). Master Services Agreement Pursuant to the amended master services agreement effective as of January 1, 2007 ("ACE-AC MSA"), Air Canada has agreed to provide certain administrative services to ACE in return for a fee. Such services relate to finance and accounting, information technology, human resources and other administrative services. Registration Rights Agreement On the closing of the Initial Public Offering, Air Canada entered into a registration rights agreement (the "Registration Rights Agreement") with ACE pursuant to which ACE has been granted certain demand and "piggy- back" registration rights by Air Canada, subject to certain restrictions, which enable ACE to require Air Canada to file a prospectus and otherwise assist with a public offering of Shares under Canadian securities laws, in accordance with the terms and conditions contained in the Registration Rights Agreement. The Registration Rights Agreement covers all Shares that are held by ACE or permitted transferees. The registration rights under the Registration Rights Agreement may be exercised in respect of all or, from time to time, in respect of a portion of the Shares held by ACE or permitted transferees, in accordance with the terms and conditions contained in the Registration Rights Agreement. The costs of any public offerings of Shares will be borne by Air Canada, other than any applicable underwriters' commissions which will be borne by ACE. The Registration Rights Agreement obligates Air Canada to provide indemnification and contribution for the benefit of ACE and its affiliates and representatives and any underwriters.

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