Morgan Stanley announcement regarding holdings in Air Canada



    TORONTO, June 2 /CNW/ - Morgan Stanley (NYSE:   MS) ("MS") announced today
that pursuant to the recent formation with Citigroup Inc. ("Citigroup") of a
new joint venture called Morgan Stanley Smith Barney ("MSSB"), MS has
indirectly acquired direction and control over 26,700 Class A Variable Voting
Shares (the "Acquired Shares") of Air Canada (TSX:AC) (the "Issuer") through
the acquisition by MSSB of certain managed client accounts of Smith Barney.
The 26,700 Acquired Shares represent approximately 0.20% of the issued and
outstanding Class A Variable Voting Shares, based on 13,382,000 Class A
Variable Voting Shares issued and outstanding as at May 29, 2009.
    As of April 3, 2007, MS owned and controlled 3,000,000 Class A Variable
Voting Shares in the aggregate representing approximately 17.75% of the then
issued and outstanding Class A Variable Voting Shares. Since that date,
through market trading carried out in the ordinary course of business, MS
acquired ownership or control over in aggregate an additional 186,900 Class A
Variable Voting Shares, which trading did not trigger any disclosure or filing
obligations on the part of MS under applicable Canadian securities laws.
    In addition, due to the attributes of the Issuer's share capital, the
number of outstanding Class A Variable Voting Shares has fluctuated since
April 3, 2007. As a result of such fluctuation, the percentage of issued and
outstanding Class A Variable Voting Shares held by MS has increased since
April 3, 2007.
    After giving effect to the acquisitions noted above, MS owns or controls
3,213,600 Class A Variable Voting Shares in the aggregate representing
approximately 24.01% of the issued and outstanding Class A Variable Voting
Shares, based on 13,382,000 Class A Variable Voting Shares issued and
outstanding as at May 29, 2009 according to information available on the
Toronto Stock Exchange website on June 1, 2009.
    MS's holdings in Class A Variable Voting Shares represents approximately
3.21% of all issued and outstanding shares of the Issuer, taken as a whole
(i.e., 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), based on 100,000,000 shares issued and outstanding as at May 29, 2009
according to information available on the Toronto Stock Exchange website on
June 1, 2009.
    Under the circumstances, the acquisitions noted above do not trigger the
formal take-over bid requirements under Canadian securities laws.
    Affiliated entities of MS having holdings included in this release are
Morgan Stanley & Co. Incorporated and Morgan Stanley Smith Barney.
    For further information and to obtain a copy of the Early Warning Report
in connection with this release please contact Carissa Ramirez, Corporate
Communications, at (212) 762-6834. The report will also be available at
www.sedar.com.

    
    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.
    

    Morgan Stanley is a leading global financial services firm providing a
wide range of investment banking, securities, investment management and wealth
management services. The Firm's employees serve clients worldwide including
corporations, governments, institutions and individuals from more than 600
offices in 36 countries. For further information about Morgan Stanley, please
visit www.morganstanley.com.





For further information:

For further information: Carissa Ramirez, Corporate Communications, at
(212) 762-6834

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