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Air Canada builds partnership with Continental Airlines to provide expanded network

July 24, 2008, Montreal /CNW Telbec/ – Air Canada today announced that it hasreached an agreement in principle with Continental Airlines, the fourthlargest carrier in the United States, to provide customers an enhanced travelexperience through access to a broader network and seamless services providedin cooperation by the two carriers.

"This is an exciting opportunity for Air Canada and Continental Airlinesto develop a deeper relationship that will be of great benefit to ourcustomers," said Ben Smith, Executive Vice President and Chief CommercialOfficer. "Through cooperation with Continental, including a proposedcodesharing arrangement, we will be able to offer customers traveling to theUnited States a vast array of enhanced travel benefits including more choiceof destinations, new routings, expanded frequent flyer benefits and loungeaccess for eligible customers. At the same time, we will be able to realizegreater efficiencies so we can compete more effectively. It is one of the manyinnovative ways we are responding to the high cost of fuel, by working withalliance partners for the benefit of our customers."

Air Canada and Continental intend, subject to obtaining regulatoryapprovals, to offer customers coordinated services and enhanced productofferings through codeshare, frequent flyer and lounge access agreements.Through Continental's hubs in Newark and Cleveland, Air Canada will offer moreoptions to the eastern United States, and through Continental's Houston hub,greater access to the southern United States, Mexico and Central America. AirCanada's proposed alliance with Continental will give customers an expandednetwork that complements Air Canada's existing North American network with itsStar Alliance partner, United Airlines. In June, Continental announced that italso plans to join Star Alliance.

In addition, Air Canada has also signed a multi-lateral frameworkagreement with Continental, United Airlines, and Lufthansa to create atransatlantic joint venture through which the carriers intend to providecustomers with more choice and streamlined service to Africa, India, Europeand the Middle East. As a first step, nine Star Alliance carriers, includingAir Canada, have filed a joint application with the U.S. Department ofTransportation to add Continental Airlines to their existing antitrustimmunity.