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Air Canada on appointment of mediators in CUPE negotiations

June 18, 2009, Montreal, Que. – Air Canada provided the following comment in response to Federal Labour Minister Rona Ambrose's appointment of the Honourable James Farley, Q.C and Mr. Jacques Lessard as mediators in its labour stability negotiations with CUPE:

"We welcome the appointment of Messrs. Farley and Lessard as mediators in our labour contract negotiations with CUPE," said Calin Rovinescu, President and CEO of Air Canada. "Mr. Farley has made an important contribution in facilitating agreements with our four other unions and we look forward to working with him and Mr. Lessard in their role as mediators. Time is of the essence as a successful outcome to negotiations with CUPE is needed in the very near term to allow us to move forward on obtaining the necessary governmental approvals for the pension funding arrangement and raising new financing."

Air Canada has thus far failed to reach agreement with CUPE, representing approximately 6,700 flight attendants on a collective agreement extension which it has been negotiating on a similar cost neutral basis to agreements reached with its four other Canadian-based unions.

CUPE yesterday declined Air Canada's final cost neutral offer, as well as other non-concessionary options proposed by Mr. Farley who was appointed by the Minister of Finance on June 4, 2009 to facilitate the negotiation of pension and labour stability agreements at Air Canada.

The Company has reached a pension moratorium agreement with each of its Canadian based unions and collective agreement extensions on a cost neutral basis for a period of 21 months with ACPA, the IAMAW, the CAW Local 2002 and CALDA.

The pension agreements agreed to by the five unions remain conditional upon Air Canada and CUPE concluding a collective agreement extension.