Investor Presentaiton

-2- PRESENTATION OF SEGMENT INFORMATION Air Canada has two operating segments: Air Canada Services and Jazz. The Air Canada Services segment is comprised of the passenger and cargo transportation services business operated by Air Canada and related ancillary services. The Jazz segment represents the results of Jazz Air LP ("Jazz LP") operating under the amended and restated capacity purchase agreement effective January 1, 2006 between Air Canada and Jazz (the "Jazz CPA"). Jazz is consolidated within Air Canada's financial statements under Accounting Guideline 15 — Consolidation of Variable Interest Entities. Air Canada consolidates Jazz as Air Canada has certain contractual interests in Jazz through the Jazz CPA which may require Air Canada to absorb certain variability in the operations of Jazz and make certain payments to Jazz. _ Under the Jazz CPA, Air Canada has provided a minimum daily utilization guarantee and a minimum capacity guarantee to Jazz, pays certain variable costs of operating Jazz aircraft and is obligated to cover the costs of certain aircraft return obligations related to Jazz aircraft covered under the Jazz CPA. Due to the terms of the Jazz CPA, Air Canada is deemed to have a variable interest in Jazz, as defined under Accounting Guideline 15 Consolidation of Variable Interest Entities. As a result, Air Canada's combined financial statements consolidate the results of Jazz as a business segment of Air Canada. Notwithstanding the consolidation of Jazz by Air Canada, Air Canada does not hold any of the limited partnership units of Jazz LP or any of the shares of its general partner, Jazz Air Holding GP Inc. On February 2, 2006, Jazz Air Income Fund completed its initial public offering and listed its units on the Toronto Stock Exchange ("TSX") under the symbol JAZ.UN. Jazz Air Income Fund currently has 75,638,223 units issued and outstanding and holds a 61.6% interest in Jazz LP. ACE currently holds a 38.4% direct interest in Jazz LP and holds 25,000,000 units of Jazz Air Income Fund, representing 33.1% of units issued and outstanding. In total, ACE currently holds a 58.8% interest in Jazz. The segment information provides useful information to shareholders as it enables them to distinguish between the results of operations, cash and other assets and liabilities between the two segments. This is significant as Air Canada does not have access to the cash and other assets of Jazz, nor is there any recourse to Air Canada for any of the recognized liabilities of Jazz LP, unless otherwise specifically agreed to by Air Canada. However, Air Canada is required to pay fees to Jazz for Jazz services and may be required to assume certain obligations if such services are cancelled. Management of Air Canada ("Management") uses the segment information for making operating decisions, allocating resources and assessing performance of the segments individually. Air Canada may also utilize segment results to assess the performance of its regional operations under the Jazz CPA. For further details, refer to Notes 1 and 14 of Air Canada's combined consolidated financial statements for the year ended December 31, 2006. Air Canada's combined consolidated financial statements for the year ended December 31, 2006 are available on SEDAR at www.sedar.com. TRADEMARKS Air Canada is Air Canada's trade name and trademark. Other trademarks include Air Canada Jetz®, Air Canada JazzⓇ, Jazz TM, Air Canada Vacations®, Vacances Air CanadaⓇ, Executive First®, Executive Class®, Expedair®, AC Expedair™M, AC Priority™, AC Air Freight™, AC LynxTM, Hospitality Service®, Service Hospitalité®, Rapidair®, Maple Leaf™, Feuille d'Érable™, AC WEBSAVER™, Super Elite™ and Super Élite™. Star Alliance® is a trademark of Air Canada and of other members of the Star Alliance® group. This Initial Annual Information Form also includes references to trade names and trademarks of companies other than Air Canada, which trade names and trademarks are the properties of their respective owners. Aeroplan® and Aéroplan® are registered trademarks of Aeroplan Limited Partnership ("Aeroplan LP") and are licensed to Air Canada.

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