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Porter Airlines seeks court order to separate Jazz from Air Canada

Toronto, Ont., Oct. 26, 2007 -  Porter Airlines Inc. is seeking a court order to split the Jazz Air regional airline from the Air Canada mainline carrier.


October 26, 2007
Carey Fredericks

Toronto, Ont., Oct. 26, 2007 –  Porter Airlines Inc. is seeking a court order
to split the Jazz Air regional airline from the Air Canada mainline carrier.

The year-old operator of a turboprop service centred on the
Toronto Island airport said Friday it also is demanding $850 million
in damages from the two bigger airlines.

Porter alleges the relationship between Air Canada and Jazz, both
spun off from ACE Aviation Holdings, violates the
Competition Act.

The year-old airline's legal action, in a statement of defence
and counterclaim in Ontario Superior Court, alleges Air Canada and
Jazz conspire to lessen competition by co-ordinating fares, avoiding
competition with each other and impeding new entrants such as
Porter.

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Porter, entangled in litigation involving Jazz and the Toronto
Port Authority over its use of the downtown airport, also complains
that Air Canada and Jazz provide discounts to corporate customers
only if they are assured of a large percentage of their business.

None of its assertions have been proven in court.

Jazz responded with a statement declaring that Porter's
allegations “are completely without merit and will be vigorously
contested in court.''

Jazz added that it “continues to seek fair and equal access at
the Toronto City Centre Airport,'' and contended that Porter's
litigation is part of an attempt to prevent competition at the
facility.

Porter founder and CEO Robert Deluce stated that “despite ACE
Aviation having reduced its stake in Jazz Air LP to approximately
20.1 per cent, the two airlines continue to co-ordinate their
businesses in a manner which we allege is anticompetitive.''

In addition to Deluce, Porter's investors include the Ontario
Municipal Employees Retirement System, equity fund EdgeStone Capital
Partners, General Electric unit GEAM International Private Equity
Fund and Dancap Private Equity Inc.