Air Canada Unveils Initiatives to Improve Customer Satisfaction

Air Canada President and Chief Executive Officer Robert Milton today unveiled a series of initiatives that will improve customer satisfaction and deliver new benefits to the customers of both Air Canada and Canadian Airlines International.

``Our customers expect top-notch service at all times,'' said Mr. Milton. ``However, we cannot totally insulate our customers from the inevitable effects of integrating these two airlines, and the sheer complexity means we can't do it overnight. But we can do a much better job of telling them how we are addressing problems and when they will be fixed.''

The initiatives, covering subjects such as information systems integration, facility upgrades and a staff hiring plan, are contained in the first of a series of progress reports issued by Mr. Milton, which spell out the actions required and the dates they will be implemented.

``We know what has to be done and we're sparing no effort to achieve it,'' he said. ``It's also important we keep our customers informed every step of the way so we're going to be up front about the improvements we're making and when.''

Mr. Milton acknowledged that Canadian consumers expect efficient, reliable and uninterrupted air service. In that context, Air Canada is totally committed to enhancing service on the ground and in the air by resolving outstanding issues, including the current mediation with Air Canada pilots.

Our 180-day Commitment/Progress Report informs Canadians about the challenges facing Air Canada as it integrates Canadian Airlines International.

It outlines the legal, financial, labour relations, operational, technological and commercial issues, and the steps the airline has already taken to address them. It also outlines Air Canada's commitments, with target dates, for resolving the issues of most concern to its customers, including airport congestion, waiting times at call centres, frequent flyer programs, fares and pricing, and the enhancements at Toronto's Pearson Airport.

``There are a number of critical milestones that we will reach before the end of the year,'' said Mr. Milton. ``For example, by October, we will have completed the key elements of the integration of over 300 highly complex software applications governing everything from the reservation systems of the two airlines to the Web sites, the call centres and the flight information displays in airports.''

``We are committed to making that deadline, and when we do, customers will see a dramatic difference in service.'' Milton also revealed that by the end of the year, Air Canada will have over 2,000 more employees than both Air Canada and Canadian had at the end of 1999. Most staff are in customer service functions such as call centres, airports and in-flight with the direct benefit of enhancing service levels.

``Pearson Airport is a key priority for us,'' he added. ``More than 65% of both Air Canada's and Canadian's customers pass through Pearson, so implementing solutions there is critical to rebuilding our relationship with them.

``However, we don't have the luxury of closing down while we make these improvements. We're still running 900 flights a day through the airport.''

In addition to the substantial progress already made at Pearson, Mr. Milton committed to:

- Completing a new ticketing area in Terminal 2 by September;

- Adding two more priority check-in counters at Terminal 2 by August 15, bringing the total to 10 counters;

- Completing the construction of three additional aircraft bridges by mid-August to provide back- up gate capacity and ease congestion at peak operating times;

- Hiring and training 150 new people for customer service at Pearson by August 11, with a further 50 people transferring from other Air Canada departments in September;

- Hiring and training 242 new people for cargo, baggage and aircraft handling. These new employees will all be on the job by September.

Regular updates of Our 180-day Commitment/Progress Report will be issued at 30-day intervals until February next year. The updates will track several areas where the airline is making improvements and combining services, with emphasis on developments of most concern to customers. Air Canada and Canadian employees, who have worked diligently to maintain customer service throughout the integration period to date, will also be given updates of the report.

The announcement of Our 180-day Commitment/Progress Report follows the June 27 Court approval of the debt restructuring plan at CAIL. Air Canada is now free to proceed with the integration and manage the two airlines as one, giving the Company more flexibility to make decisions for the benefit of customers.