Investor Presentaiton

- 23- speed and flight range and will provide Air Canada with the ability to serve new markets that cannot currently be served in an efficient manner. As a result of the new committed Boeing 777 and 787 aircraft, Air Canada expects to eventually remove from operation 10 Airbus A340 aircraft as well as most of its Boeing 767-200 aircraft. Air Canada has received financing commitments from Boeing and the engine manufacturer covering all firm aircraft orders for approximately 90% of the capital expenditure, with the remainder to be funded from internally available resources. Air Canada is evaluating financing arrangements for the first seven Boeing 777 aircraft deliveries in 2007. Narrowbody and Regional Jet Aircraft Fleet Current Fleet of Narrowbody and Regional Jet Aircraft As at December 31, 2006, Air Canada operated 135 narrowbody aircraft, including 102 Airbus narrowbody aircraft. These aircraft are configured in two classes of service: Executive Class and Economy Class. The Airbus A320 aircraft is a 140-seat, twin-engine aircraft. The twin-engine Airbus A319 offers 120 seats and is essentially a shortened version of the Airbus A320 aircraft, with the same engines, operating systems and flight deck. The twin-engine Airbus A321 is the largest narrowbody aircraft in the Airbus family, with 166 seats. The Embraer ERJ-190 and ERJ-175 aircraft are 93-seat and 73-seat twin-engine aircraft, respectively. These large regional jets have lower trip operating costs than conventional narrowbody aircraft. All of these narrowbody aircraft types primarily serve Air Canada's domestic and transborder routes. Embraer Orders and Financing Terms In 2004, Air Canada signed a definitive purchase agreement with Embraer covering firm orders for 45 Embraer ERJ-190 aircraft as well as 15 Embraer ERJ-175 aircraft. As of March 13, 2007, Air Canada has taken delivery of all 15 Embraer ERJ-175 aircraft and 20 Embraer ERJ-190 aircraft. An additional 25 Embraer ERJ-190 aircraft are currently scheduled to be delivered by January 2008, for a total Embraer fleet of 60 aircraft. The Embraer aircraft are introduced in Air Canada's fleet both for growth and replacement of a portion of Air Canada's older Airbus A319 and A320 aircraft. As of the date hereof, Air Canada has rights to exercise options for up to 43 additional Embraer ERJ-190 aircraft. The purchase agreement also allows Air Canada to convert its orders to other Embraer models. Air Canada received loans from a syndicate of banks and the manufacturer covering approximately 80% of the capital expenditure of the first 18 firm Embraer ERJ-190 aircraft, all of which were delivered as at December 31, 2006. Air Canada has also received loan commitments from a third party and from a syndicate of banks covering approximately 80% of the capital expenditure of the remaining 27 firm Embraer ERJ-190 aircraft deliveries. The remainder of the capital expenditures is expected to be funded from internally available resources. Jazz's Regional Jet and Turboprop Aircraft Fleet Pursuant to the Jazz CPA, Air Canada purchases capacity from Jazz on Jazz's aircraft which are subject to the Jazz CPA (the "Covered Aircraft") in consideration for the payment of certain fees by Air Canada to Jazz. All Bombardier regional jet aircraft in Jazz's fleet are leased by Air Canada or Air Canada Capital Ltd., a wholly owned subsidiary of Air Canada, and subleased to Jazz which operates them. See "Relationships and Related Party Transactions Between Air Canada and Jazz, Aeroplan and ACTS - - Relationship Between Air Canada and Jazz". At December 31, 2006, as part of the Jazz CPA, Jazz operated on behalf of Air Canada 73 Bombardier regional jet aircraft. In 2004, Air Canada entered into an agreement with Bombardier Inc. ("Bombardier") covering firm orders for 15 Bombardier CRJ-705 and 15 Bombardier CRJ-200 aircraft, all of which were delivered between 2004 and the end of 2005. The 50-seat Bombardier CRJ-100/200 is a twin engine regional jet aircraft designed to provide superior performance and operating efficiencies for the regional airline industry. The Bombardier CRJ-100/200 is used primarily to serve lower density markets on routes of less than 1,000 miles, and to serve larger markets at "off peak" times. The 75-seat Bombardier CRJ-705 is configured into 10 Executive Class seats and 65 Economy Class seats and is considered to be an economical aircraft due to its operational efficiencies and lower trip costs. These aircraft are used in selected "point-to-point" markets, transborder markets, and to develop selected domestic markets. In addition, as at December 31, 2006, Jazz operated 60 Bombardier Dash-8 aircraft as Covered Aircraft under the Jazz CPA. The Dash 8-100 is a twin engine turboprop medium range aircraft with seating capacity of 37 passengers. The 50-seat Bombardier Dash 8-300 has advanced turboprop characteristics that approach those of a jet aircraft.

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