Air Canada announces Memorandum of Understanding with one of its principal credit card processors

    MONTREAL, May 25 /CNW Telbec/ - Air Canada has entered into a Memorandum
of Understanding (MOU) with one of its principal credit card processors
whereby the parties have agreed to amend certain credit card processing
agreements under which the level of unrestricted cash required to be
maintained by Air Canada is reduced and Air Canada provides the processor with
security to be accumulated over a certain period of time.
    "The agreement negotiated by Air Canada and one of its principal credit
card processors is an important step in providing financial stability for our
company during this challenging period," said Calin Rovinescu, President and
Chief Executive Officer of Air Canada. "In the immediate term, obtaining a
funding moratorium on our pension payments remains the critical priority. We
continue to work on this and other initiatives with our unions. Moreover, we
are in discussions with several potential lenders regarding additional
financing, which will likely require labour stability as a condition to any
advance. With the cooperation of our various stakeholders, I am confident we
can achieve stability."
    The MOU provides that the level of unrestricted cash required in order to
avoid Air Canada having to provide the processor with additional cash deposits
is now reduced to $800 million. Should Air Canada maintain unrestricted cash
of more than $1.2 billion for two consecutive months, the amount of
unrestricted cash required increases to $1.1 billion. In the event that the
required level of unrestricted cash is increased, the processor will return
all security to Air Canada.
    Certain amendments contained in the MOU are conditional upon the parties
concluding formal documentation. In the event that such documentation is not
completed by June 15, 2009, the parties will revert to the original terms of
the credit card processing agreements.


    Air Canada's public communications may include written or oral
forward-looking statements within the meaning of applicable securities laws.
Forward-looking statements, by their nature, are based on assumptions and are
subject to important risks and uncertainties. Any forecasts or forward-looking
predictions or statements cannot be relied upon due to, amongst other things,
changing external events and general uncertainties of the business. Actual
results may differ materially from results indicated in forward-looking
statements due to a number of factors, including without limitation, industry,
market, credit and economic conditions, the ability to reduce operating costs
and secure financing, pension issues, energy prices, currency exchange and
interest rates, employee and labour relations, competition, war, terrorist
acts, epidemic diseases, insurance issues and costs, changes in demand due to
the seasonal nature of the business, supply issues, changes in laws,
regulatory developments or proceedings, pending and future litigation and
actions by third parties as well as the factors identified throughout Air
Canada's public disclosure file available at The
forward-looking statements contained in this news release represent Air
Canada's expectations as of the date of this news release 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, except as required
under applicable securities regulations.
    %SEDAR: 00001324EF

For further information:

For further information: Isabelle Arthur (Montréal), (514) 422-5788;
Peter Fitzpatrick (Toronto), (416) 263-5576; Angela Mah (Vancouver), (604)

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