Presented to Raymond James Ltd. at the 2002 Institutional Conference Vancouver, June 3-4, 2002

1. Presented to Raymond James Ltd. at the 2002 Institutional Conference Vancouver, June 3-4, 2002

2. Substantially Improved Performance 2002 2001(millions) Q1 Q1 Change Oper. Revenue $ 2,286 $ 2,344 $(58) Oper. Expense 2,446 2,637 (191) Oper. Loss (160) (293) 133 Non-oper. Expense (65) (1) (64) Loss Before Tax $ (225) $ (294) $ 69 Non-recurring Items (36) 89 (125) Loss Before Tax Excl. Non-recur. Items $ (189) $ (383) $ 194

3. Key Performance Factors • Strengthening demand • Unit revenue performance beats all U.S. Majors • market share up in all services • disciplined capacity • highest load factors in North America • yield recovering

4. Key Performance Factors • Fleet renewed and reconfigured • hours flown cut……………………... 13% • seat mile capacity down only……... 7% • Labour productivity increases • capacity per employee up…………. 11% • traffic per employee up……………. 19% • employee numbers down 6,400 or.. 14%

5. Key Performance Factors • Costs cut • commissions • maintenance • fuel price down • fuel productivity up due to new aircraft & more seats • fleet more efficient • over 170 ongoing projects • Unit cost performance beats U.S. industry

6. Best Operating Results* Of Any Major International Carrier In North America AC % Operating Margin 0 -5 -10 -15 -20 -25 -30 US Q1 Q2 Q3 Q4 Q1 2001 2002 * Pre-government assistance - US = 6 majors

7. Air Canada Revenue Recovering Faster Q1 2002/2001 % change 5 0 -5 -10 -15 -20 -25 -30 United US Delta Cont. NW AMR AC

8. Air Canada’s 1st Quarter RASM Outperforms Industry Year/Year % Change AC* 5 0 -5 -10 -15 -20 -25 US** Q1 Q2 Q3 Q4 Q1 2001 2002 * Mainline * *Source ATA

9. Canada and Other International RASMs Up - U.S. Weak Year/Year % Change 15 10 5 0 -5 -10 -15 Canada U.S. Other Int’l Total Q1 2002

10. Unit Cost** Performance Outpaces Industry Year/Year % Change AC* US 10 8 6 4 2 0 -2 -4 Q1 Q2 Q3 Q4 Q1 2001 2002 * Mainline * * Adjusted for one-timers; US = 6 majors

11. All Expense Categories Down Except Aircraft Rent And User Fees Year/Year % Change 30% 20% 10% 0% -10% -20% -30% RPMs ASMs Comm. Food & Bar A/C Mtce UserFees A/C Rent Dep. Other Q1 2002/2001

12. Why Create Low-fare Products? • Full fare business segment has shrunk • Will return but not at same level • Leisure and price sensitive business market growing • Full service costs too high for that market • Low fare segment strong in good times and bad • Full service remains critical for long-haul international and high volume/frequency North American markets

13. Air Canada’s Products Mainline Jazz Tango Zip AC Jetz

14. “Air Canada” Hub – network Transborder and Domestic network Rapidair International Two-class Air Canada brand Air Canada code Air Canada’s Products Mainline Jazz Tango Zip AC Jetz

15. Key feed to mainline Regional markets Good frequency coverage Air Canada’s Products Jazz Mainline Tango Zip AC Jetz • Distinct brand • Unique code* * Air Canada codeshare

16. Low fare Lower cost Supplemental flying in key markets Air Canada’s Products Tango Mainline Jazz Zip AC Jetz • Sun, long haul domestic, transcontinental routes • Distinct brand • Air Canada code

17. Air Canada’s Products • Leisure, low yield • Low cost • Point-to-point, short haul Zip Mainline Jazz Tango AC Jetz • Domestic/Transborder • Distinct brand • Unique code* * Air Canada codeshare

18. Air Canada’s Products AC Jetz Mainline Jazz Tango Zip • Specialty charter • Executive First configuration of surplus B-737 • Focus on specialty charters (i.e. sports teams, etc.) • Concierge service

19. Key Differences Between Tango and Zip Tango Zip Structure Air CanadaBrand Air Canada Subsidiary Network Mostly long haul, Short haul point to point N.A. N.A. Labour cost Same as mainlineLower than mainline and Tango Interlining No Full network connectivity Size Unlimited Limited to 20 acft. under scope clause

20. Manpower Levels Are Down Full Time Equivalents (mainline) 40,000 38,000 36,000 34,000 32,000 30,000 Q4 2000 Q2 2001 Q4 2001 Q1 2002

21. Labor Contract Stability Air CanadaCanadian Maintenance and Ramp June 2005- Flight Attendants Oct. 2001June 2004 Pilots Apr. 2004- Customer Sales & Service Mar. 2004-

22. Future Labor Cost Much Lower Than U.S. Carriers 2002 2003 2004 Maintenance and Ramp 2.5% 2.5% 2.5% Flight Attendants - - - Pilots 2.5% 2.5% - Customer Sales & Service 2.5% 2.5% - Air Canada

23. Smaller / Younger Fleet Change Change Dec / 00 Dec / 01 01/00 Dec/02 02/01 747 7 6 - 1 6 - 330/340 16 20 + 4 17 - 3 767-200/300 51 49 - 2 46 - 3 319/320/321 82 90 + 8 105 +15 737 43 34 -9 27 - 7 DC9 17 4 -13 - - 4 CRJ 25 25 - 25 - Total Mainline 241 228 -13 226 - 2 Jazz 134 101 -33 104 + 3 TOTAL 375 329 -46 330 + 1

24. 2002 Aircraft Deliveries Sale/ Operating Leasebacks Leases A340-500 2 - A321-200 5 - A319-100 5 3 A320-200 - 3 CRJ (Jazz) - 10 Total 12 16

25. Low Cap Ex In 2002($ millions) Aircraft $ 919 Financing ( 918 ) Net $ 1 Other 227 Total Mainline $ 228 Subs 15 Total $ 243

26. Good Liquidity • $924 million in cash at March 31, 2002 • Approximately $2.8 billion of unencumbered assets • aircraft • engines and spares • inventory • real estate • lease deposit receivables • accounts receivable

27. Significant Value In Air Canada’s Business Units

28. Leverage Better Than It Looks - One time charges in shareholders’ equity ($millions)

29. Underlying Assets Total Debt Cash generating airline at start of cycle $3.6 billion LTD $2.8 billion in unencumbered assets 0.5 Current LTD Value in business units 0.8 Perpetuals 0.1 Convert. debs 5.0 (.9) Cash $4.1 billion Net debt $8.2 billion + in leased aircraft $8.2 billion Operating leases Leverage Better Than It Looks - Debt and underlying assets

30. Investment Considerations • Commanding share of all markets served • Comprehensive low fare market strategy • Solid hub and network strategy • Traffic almost back to normal • Pricing recovering • Industry capacity rationalized • Unit costs coming down • Good liquidity • Low capital expenses going forward • Substantial business unit value

31. Caution Concerning Forward-looking Information: Certain statements made in this presentation may be of a forward-looking nature and subject to important risks and uncertainties. The results indicated in these statements could differ materially from actual results for a number of reasons, including without limitation, general industry, market and economic conditions, the ability to reduce operating costs and fully integrate the operations of Canadian Airlines, employment relations, energy prices, currency exchange rates, interest rates, changes in laws, adverse regulatory developments or proceedings and pending litigation. Any forward-looking statements contained in this presentation represent Air Canada’s expectations as of June 3, 2002 and are subject to change after such date. However, Air Canada disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.