Air Canada Reaches Agreement with Respect to Leases for 38 Airbus Aircraft

Air Canada has reached a tentative restructuring agreement relating to aircraft leases for 38 Airbus aircraft consisting of 22 A319s, eight A330s, and eight A340s involving syndicates of lenders supported by the Export Credit Agencies of the United Kingdom, France and Germany.

Under the terms of the tentative agreement, rental payments for each aircraft will be restructured consistent with Air Canada's restructuring plan. The agreement is subject to the fulfillment of various conditions and internal credit and other approvals of interested parties. The detailed terms of the agreement are confidential.

"Air Canada's restructuring continues at a rapid pace," said Calin Rovinescu, Executive Vice-President and Chief Restructuring Officer. "While the current focus is on raising equity capital to provide a stable financial base for the airline upon emergence from CCAA, we are at the same time moving forward with the claims process and working to complete the renegotiation of aircraft leases. This agreement brings to 170 the total number of aircraft with restructured terms. To date, 18 aircraft have been returned to lessors and with this latest agreement we can now make clearer decisions on what leases are to be repudiated to complete the process," concluded Mr. Rovinescu.

Air Canada and its financial advisors are involved in intensive negotiations with aircraft lessors and lenders on revised aircraft lease arrangements consistent with current rates and the Company's restructuring plan. The Company will resume aircraft lease payments as new agreements are reached.