Air Canada

Air Canada now expects its full year 2008 capacity, as measured in available seat miles (ASM), to change between negative 1.0 and positive 1.0 per cent, compared to the previous year (lower than the full year 2008 capacity increase of between 1.0 and 2.5 per cent compared to 2007 projected in Air Canada’s press release dated May 8, 2008).

As originally projected in Air Canada’s May 8, 2008 press release, full year domestic ASM growth is expected to increase by 2.5 per cent compared to 2007. For the second quarter, Air Canada expects ASM growth to be consistent with previous guidance (provided in Air Canada’s May 8, 2008 press release) of between 2.0 and 3.0 per cent, compared to the previous year’s second quarter.

Air Canada, like other North American carriers, announced that it will reduce fall and winter capacity in response to the record price of fuel. Our preference is to reduce frequencies, downgauge aircraft and maintain the breadth of our network via alternate routings if necessary.