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Air Canada Performs Well In Q3

by Robert Lee, for, London

12 November 2007

It was announced on Friday that Air Canada performed well in the third quarter of the year, with EBITDAR (Earnings Before Interest, Taxes, Depreciation, Amortization and Rent) of $561 million, an increase of $124 million over the same period in 2006.

According to ACE Aviation Holdings, Air Canada's parent company, passenger revenues increased by $108 million or 4% over the 2006 quarter. This increase was partly offset by a decline of $25 million in cargo revenues, driven by freighter capacity reduction.

Operating costs decreased by $26 million or 1% over the 2006 quarter. Unit cost, as measured by operating expense per ASM, decreased 4.4% over the third quarter of 2006.

Robert Milton, Chairman, President and Chief Executive Officer of ACE Aviation Holdings announced that:

"I am particularly pleased with the results for Air Canada for the quarter. Air Canada has delivered the improved operating results signalled at the time of the release of the second quarter results. The benefits of its fleet replacement and refurbishment programs are beginning to translate into improving financial performance for the business. Management expects that this program will continue to yield improved operating results for the remainder of 2007 and beyond."

Milton will be retiring as Chairman of Air Canada and leaving its Board of Directors on January 1, 2008. However, he will remain as Chairman, President and CEO of ACE.

ACE further announced that:

"In connection with the wind-up process of ACE determined by the Board and in accordance with the rules of the ACE stock option plan, the Board has resolved to accelerate the exercisability of the remaining unvested ACE stock options, effective on November 12. Trading restrictions, including blackout periods, remain in effect.

"ACE has cash of $1.85 billion and other assets, primarily its interests in Air Canada, Aeroplan and Jazz, with a market value of $2.4 billion. Management will continue to execute on ACE's strategy to surface shareholder value on a timely basis over the coming months. In particular, ACE intends to continue to realize its remaining non-cash interests in Air Canada, Aeroplan, and Jazz, and also return excess cash to shareholders," explained Mr Milton.

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