IN-FLIGHT ENHANCEMENTS PLACE AIR CANADA AT THE LEADING EDGE

MONTREAL, October 19, 2004 — Air Canada today unveiled in-flight enhancements for entertainment and seating that will place Air Canada at the leading edge of international quality carriers. The carrier will introduce a new in-flight entertainment (IFE) system that will bring all of its customers industry leading audio and video on demand (AVOD). Air Canada will thus become the first airline in the Americas to offer fully interactive, personalized entertainment choices to all customers on all of its aircraft.

Air Canada also confirmed today that it will proceed with the introduction of the newest generation of premium lie flat seating for all of its Executive First international customers in order to ensure that its customers experience the very best in comfort available. Air Canada expects to introduce luxury lie flat seating across its international fleet beginning in 2005.

The new IFE system will give each customer complete control with fully interactive touch screen technology to make personalized entertainment choices that feature digital image and surround sound quality. Air Canada customers will have a choice of up to 80 hours of video programming on personal television screens at each seat and up to 50 choices of music CDs. Introduction of the new system is scheduled to begin with the arrival of new Bombardier CRJ 705 aircraft in May 2005, and installation on Air Canada's international fleet is planned to begin in September 2005. The selection of the manufacturer will be announced upon finalization of the contract.

The introduction of a single IFE system fleet wide will replace multiple systems currently in use and provide customers and employees with added benefits of ease of use as well as streamlining training and maintenance.

The introduction of new in-flight product enhancements also marks a new chapter in the airline's history. Other initiatives being undertaken by Air Canada updating the design and colours of its aircraft livery and interiors, the design of new uniforms, the launch of new ad campaigns and a fleet renewal program for its North American fleet that will facilitate the introduction of new frequencies and routes.