Air Canada to Launch Low Cost Airline

Air Canada has unveiled plans to form an integrated leisure group, combining the activities of its tour operator business, Air Canada Vacations, with the new low-cost leisure airline it hopes to launch in 2013.

The airline has appointed Michael Friisdahl as President and Chief Executive Officer to lead its new leisure group which will be a wholly owned subsidiary of Air Canada.

"The creation of a leisure group that combines our new low-cost leisure carrier with Air Canada Vacations, our successful tour operator business, is a major milestone for Air Canada," said Calin Rovinescu, President and Chief Executive Officer. "Our new leisure group will benefit from combining the low cost carrier with the strong brand reputation of Air Canada Vacations and leveraging the established marketing and distribution channels of both Air Canada Vacations and Air Canada. As a result, Air Canada will be able to compete more effectively in this highly dynamic and expanding market."

"I extend a warm welcome to Michael Friisdahl as he takes on this key leadership role in this strategic component of Air Canada's overall growth strategy," continued Mr. Rovinescu. "With Michael's experience in the international leisure travel business, he brings a wealth of talent and a proven record for success in this industry. We look forward to his coming on board and being part of this exciting venture."

Mr. Friisdahl will report to Ben Smith, Executive Vice President and Chief Commercial Officer of Air Canada.

Air Canada's New Low Cost Leisure Airline

The new low-cost leisure carrier is scheduled to commence service in June 2013 with two Boeing 767-300ER aircraft and two Airbus A319 aircraft that will be released from Air Canada's mainline fleet.

The airline will serve popular holiday destinations in Europe and the Caribbean that are either currently underserved, or that do not generate adequate profitability with Air Canada's existing cost structure.

At launch, the leisure carrier will assume select Air Canada leisure services and will also operate certain new destinations not currently operated by Air Canada.

The leisure carrier will increase its fleet as Air Canada starts to take delivery of new Boeing 787 Dreamliner aircraft in 2014, thereby freeing up aircraft for transfer to the leisure carrier. As this occurs and subject to commercial demand, the leisure carrier may operate up to 20 Boeing 767-300ER aircraft and 30 Airbus A319 aircraft, for a total of 50 aircraft.

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