Early Warning Report



    NEW YORK, Jan. 11 /CNW/ - This announcement relates to the holdings of
Morgan Stanley and certain of its affiliated entities in ACE Aviation Holdings
Inc. (TSX:ACE.A) (the "Issuer"). Morgan Stanley is issuing this release in its
capacity as the parent holding company of, and indirect beneficial owner of
securities held by, Morgan Stanley Canada Limited ("MSCL") and its affiliated
entities.
    Morgan Stanley announces that on January 10, 2008, MSCL entered into an
agreement to acquire an aggregate of 3,200,000 Preferred Shares (the "Acquired
Shares") of the Issuer in a private transaction. After giving effect to the
acquisition noted above, Morgan Stanley will own and control
3,200,000 Preferred Shares, in the aggregate representing approximately
25.6% of the issued and outstanding Preferred Shares.
    As at January 11, 2008, the Acquired Shares are convertible into
approximately 2,894,080 Class A Variable Voting Shares. After giving effect to
the acquisition above and including the Acquired Shares on an as-converted
basis, Morgan Stanley owns and controls 4,658,512 Class A Variable Voting
Shares in the aggregate, representing 10.33% of the Class A Variable Voting
Shares which would be issued and outstanding after such conversion and
approximately 7.91% of the Class A Variable Voting Shares and Class B Voting
Shares of the Issuer, taken as a whole (aggregating the total number of issued
and outstanding Class A Variable Voting Shares with the total number of issued
and outstanding Class B Voting Shares). The foregoing calculations are based
on 42,205,531 Class A Variable Voting Shares and 13,814,798 Class B Voting
Shares issued and outstanding as at January 11, 2008(1).
    All securities of the Issuer were acquired for investment purposes
through transactions made in the ordinary course of business, and not for the
purpose of influencing the control or direction of the Issuer.
    This release includes holdings of the following affiliated entities of
Morgan Stanley: Morgan Stanley & Co. Incorporated, Morgan Stanley & Co.
International plc, and Morgan Stanley Capital (Luxembourg) S.A.
    Morgan Stanley will be filing reports under National Instrument 62-103 of
the Canadian Securities Administrators in connection with this acquisition.
For further information and to obtain copy of such reports please contact Mary
Claire Delaney, Corporate Communications, at (212) 762-6880.

    Morgan Stanley
    1585 Broadway
    New York, NY 10036

    The Toronto Stock Exchange has not reviewed and does not accept
    responsibility for the adequacy or accuracy of this release.

    
    -----------------------------------
    (1) The number of issued and outstanding shares of the Issuer relied
    upon herein is based on: (i) the information available on the Toronto
    Stock Exchange on January 10, 2008, which states that as at
    January 9, 2008, 82,228,958 Class A Variable Voting Shares are issued and
    outstanding and 23,708,964 Class B Voting Shares are issued and
    outstanding; and (ii) subtracting the 40,023,427 Class A Variable Voting
    Shares and 9,894,166 Class B Voting Shares that the Issuer publicly
    confirmed it had taken up and accepted for purchase and cancellation
    pursuant to its offer to purchase which expired at 5 p.m. (Montreal time)
    on January 10, 2008.
    





For further information:

For further information: and to obtain copy of such reports please
contact Mary Claire Delaney, Corporate Communications, at (212) 762-6880

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MORGAN STANLEY

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