Investor Presentaiton

- 43 - agreed to give Aeroplan reciprocal access and internal programs that are not denominated in a reward currency, as well as certain other programs operated by third parties if particular conditions are met. This exclusivity provision shall cease to apply if, in four consecutive quarters based on a quarterly, year-over-year comparison, a very significant decrease occurs in the total number of Aeroplan miles accumulated in the Aeroplan program, provided that such decrease is unrelated to material reductions in the seat capacity of Air Canada and Jazz (an "Aeroplan Material Change"). Alternatively, Air Canada may terminate the Aeroplan CPSA upon the occurrence of an Aeroplan Material Change. Under the Aeroplan CPSA, Air Canada retained responsibility for the miles to be redeemed from accumulations up to December 31, 2001. Aeroplan LP assumed responsibility for all miles issued beginning January 1, 2002. With the assistance of independent experts, management has re-estimated the number of miles expected to be redeemed. Management now expects that 112 billion miles will be redeemed compared to the original estimate of 103 billion. Effective October 13, 2006, by amendment, Air Canada has assumed responsibility for the redemption of up to 112 billion miles and, as a result, recorded a special charge of $102 million for the incremental 9 billion miles. For further details, refer to Note 20 of Air Canada's combined consolidated financial statements for the year ended December 31, 2006, which Note 20 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. Subject to the foregoing, the Aeroplan CPSA expires on June 29, 2020 with four automatic renewals of five years each, unless either party provides written notice to the other of its intention not to renew at least 12 months prior to the expiry of the initial term or the then current renewal term. Either party is entitled to terminate the Aeroplan CPSA upon the occurrence of an event of default (as determined in accordance with the terms of the Aeroplan CPSA). Aeroplan Database Agreement Pursuant to the Aeroplan Database Agreement, Aeroplan manages Air Canada's passenger information database. The Aeroplan Database Agreement also allows Aeroplan to access and use the Air Canada database information for statistical purposes, and, for a fee, for revenue generating and general marketing purposes by using such information to conduct market research for other Aeroplan partners who are not in direct competition with Air Canada. Air Canada is entitled to access and use the Aeroplan database information for certain purposes, including pre-approved targeted marketing activities. The access and usage by each of Aeroplan and Air Canada is subject to adherence to any applicable confidentiality and privacy restrictions and is subject to pre-established fees based on the information access or use, which fees, if any, are invoiced on a quarterly basis and are subject to revision annually. The Aeroplan Database Agreement expires on June 29, 2020. In addition, the Aeroplan Database Agreement automatically terminates in the event that the Aeroplan CPSA is terminated. Aeroplan MSA Pursuant to the Aeroplan MSA, Air Canada has agreed to provide certain services to Aeroplan in return for a fee based on Air Canada's fully allocated cost of providing such services to Aeroplan plus a mark-up to reflect overhead and administrative costs. Pursuant to the Aeroplan MSA, Air Canada provides Aeroplan with infrastructure support consisting principally of administrative services in relation to information technology, human resources, finance and accounting, and legal services. Aeroplan benefits from the information technology available to Air Canada from third parties and from Air Canada's internal information technology resources. Aeroplan may elect to terminate any services under the Aeroplan MSA (without terminating the whole Aeroplan MSA) or the entire Aeroplan MSA upon six months' prior written notice. Air Canada may elect to terminate any services under the Aeroplan MSA (without terminating the whole Aeroplan MSA) or the entire Aeroplan MSA upon 18 months' prior written notice. These termination rights do not exist with regard to the information technology services provided pursuant to the Aeroplan MSA as those services shall only be terminated contemporaneously with the termination of the agreements between Air Canada and its third party service providers. Aeroplan GSA Pursuant to the Aeroplan GSA, Aeroplan must reimburse Air Canada on a fully-allocated basis for all costs, including salary and benefits, related to a group of call centre employees who work for the benefit of Aeroplan. With regard to the shortfall in the pension plan maintained by Air Canada which covers, among others, these call centre employees, Aeroplan has agreed to pay an amount not to exceed $13.1 million over the next seven years to compensate

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