Air Canada responds to high fuel prices with temporary fuel surcharge for travel in Canada

In response to sustained high fuel prices, Air Canada announced today the implementation of a fuel surcharge of $15.00 CDN one way for travel on domestic routes, effective on tickets purchased as of May 31, 2001. The fuel surcharge is temporary and will be adjusted according to market fluctuations in fuel prices.

Air Canada's domestic surcharge compares to an $18.60 USD ($27.16 CDN) fuel-related one way domestic surcharge by major US carriers. A fuel surcharge has been in place in the US domestic market since January 2000. In addition,
US carriers have implemented, on average, an 11 percent domestic fare increase
since January 2000, compared to Air Canada's 6 percent domestic fare increase,
which was announced on December 21, 2000 and was effective January 1, 2001.

"In 2000, Air Canada made a voluntary public commitment to not increase domestic fares during the first year of integration. We met that commitment, however we significantly constrained our ability to compensate for fuel price increases, which, in total, adversely affected our operating income by almost $400 million in 2000," said Lise Fournel, Executive Vice President, Commercial. "This surcharge provides transparency on the impact of fuel prices on our operational costs," she added.

In addition, effective May 31, 2001, Air Canada will adjust its NavCanada surcharge for one way domestic travel from $7.50 CDN to $9.00 CDN, which is in line with recent NavCanada fee changes announced by other Canadian carriers.