MONTREAL, Oct. 2, 2012 /CNW Telbec/ – Air Canada today unveiled plans to
form an integrated leisure group, combining the activities of its tour
operator business, Air Canada Vacations, with its new low-cost leisure
airline to launch in 2013. In addition, the airline announced the
appointment of Michael Friisdahl as President and Chief Executive
Officer to lead its new leisure group which will be a wholly owned
subsidiary of Air Canada.

“The creation of a leisure group that combines our new low-cost leisure
carrier with Air Canada Vacations, our successful tour operator
business, is a major milestone for Air Canada,” said Calin Rovinescu,
President and Chief Executive Officer. “Our new leisure group will
benefit from combining the low cost carrier with the strong brand
reputation of Air Canada Vacations and leveraging the established
marketing and distribution channels of both Air Canada Vacations and
Air Canada. As a result, Air Canada will be able to compete more
effectively in this highly dynamic and expanding market.

“I extend a warm welcome to Michael Friisdahl as he takes on this key
leadership role in this strategic component of Air Canada’s overall
growth strategy,” continued Mr. Rovinescu. “With Michael’s experience
in the international leisure travel business, he brings a wealth of
talent and a proven record for success in this industry. We look
forward to his coming on board and being part of this exciting
venture.”

Mr. Friisdahl will report to Ben Smith, Executive Vice President and
Chief Commercial Officer of Air Canada.

Air Canada’s New Leisure Airline Prepares for Take-off

The new low-cost leisure carrier will commence service in June 2013 with
two Boeing 767-300ER aircraft and two Airbus A319 aircraft that will be
released from Air Canada’s mainline fleet. It will serve popular
holiday destinations in Europe and the Caribbean that are either
currently underserved, or that do not generate adequate profitability
with Air Canada’s existing cost structure. At launch, the leisure
carrier will assume select Air Canada leisure services and will also
operate certain new destinations not currently operated by Air Canada.
Further details on the leisure airline’s summer 2013 program, schedule
and product offering will be communicated later this fall with Air
Canada’s 2013 schedule. The carrier’s plans are subject to obtaining
the necessary regulatory approvals.

The leisure carrier will increase its fleet as Air Canada starts to take
delivery of new Boeing 787 Dreamliner aircraft in 2014, thereby freeing
up aircraft for transfer to the leisure carrier. As this occurs and
subject to commercial demand, the leisure carrier may operate up to 20
Boeing 767-300ER aircraft and 30 Airbus A319 aircraft, for a total of
50 aircraft.

On September 20, 2012, Air Canada announced that it will hire more than
900 employees over the next 12 months to meet its planned workforce
requirements at the main airline. In addition, 200 new jobs will be
created for flight attendants and pilots at the new low-cost leisure
carrier.

About Michael Friisdahl

Michael Friisdahl has more than 25 years of experience in the
international leisure travel and hospitality business. Prior to joining
Air Canada, he held the positions of Chief Executive Officer and Member
of the Group Executive Board at Thomas Cook North America. Mr.
Friisdahl previously held the positions of President and Chief
Operating Officer of Thomas Cook North America (2001-2003) and of
Thomas Cook Canada (2000-2003). Under his leadership, Thomas Cook
became a leading leisure travel group in Canada with significant growth
in revenues. Prior to joining Thomas Cook, he was the Chief Executive
Officer and Partner of the tour operator Holiday Network which he
successfully grew until its sale to My Travel Group plc (which
subsequently merged with Thomas Cook) in 2000.

About Air Canada Vacations

Air Canada Vacations is a leading Canadian tour operator offering a wide
assortment of leisure travel packages including cruises and tours. All
packages include accommodation, Aeroplan Miles and roundtrip airfare
aboard Air Canada and its Star Alliance partners. Repeat recipient of
the Consumer’s Choice Award for Best Travel Wholesaler, Air Canada
Vacations services over 100 destinations in the Caribbean, Central &
South America, Asia, Europe, and in the U.S. For more information,
visit www.aircanadavacations.com

About Air Canada

Air Canada is Canada’s largest domestic and international airline
serving more than 175 destinations on five continents. Canada’s flag
carrier is the 15th largest commercial airline in the world and in 2011
served more than 33 million customers. Air Canada provides scheduled
passenger service directly to 59 Canadian cities, 56 destinations in
the United States and 63 cities in Europe, the Middle East, Asia,
Australia, the Caribbean, Mexico and South America. Air Canada is a
founding member of Star Alliance, the world’s most comprehensive air
transportation network serving 1,356 destinations in 193 countries. In
2012, Air Canada was ranked Best International Airline in North America
in a worldwide survey of more than 18 million airline passengers
conducted by independent research firm Skytrax.

CAUTION REGARDING FORWARD-LOOKING INFORMATION

Air Canada’s public communications may include forward-looking
statements within the meaning of applicable securities laws.
Forward-looking statements, by their nature, are based on assumptions
and are subject to important risks and uncertainties. Forward-looking
statements cannot be relied upon due to, amongst other things, changing
external events and general uncertainties of the business. Actual
results may differ materially from results indicated in forward-looking
statements due to a number of factors, including without limitation,
industry, market, credit and economic conditions, the ability to reduce
operating costs and secure financing, pension issues, energy prices,
employee and labour relations, currency exchange and interest rates,
competition, war, terrorist acts, epidemic diseases, environmental
factors (including weather systems and other natural phenomena and
factors arising from man-made sources), insurance issues and costs,
changes in demand due to the seasonal nature of the business, supply
issues, changes in laws, regulatory developments or proceedings,
pending and future litigation and actions by third parties as well as
the factors identified throughout Air Canada’s public disclosure file
available at www.sedar.com. Any forward-looking statements contained in this news release
represent Air Canada’s expectations as of date of this news release and
are subject to change after such date. However, Air Canada disclaims
any intention or obligation to update or revise any forward-looking
statements whether as a result of new information, future events or
otherwise, except as required under applicable securities regulations.

SOURCE AIR CANADA