Air Canada Pension Funding Arrangements to be Extended with Specific New Conditions Attached

Air Canada Pension Funding Arrangements to be Extended with Specific New 
Conditions Attached 
MONTREAL, March 12, 2013 /CNW Telbec/ - Air Canada and the Government of 
Canada have agreed to an extension of Air Canada's pension funding 
arrangements to January 30, 2021. After lengthy negotiations the initial Air 
Canada proposal was strengthened with additional required solvency payments, a 
shortened term and specific new conditions that will ensure that all employees 
and executives of Air Canada are part of the solution. 
This arrangement comes as a result of the upcoming expiration of the Air 
Canada Pension Plan Funding Regulations, 2009 on January 30, 2014. In the 
current extremely low interest rate environment, Air Canada's pension solvency 
deficit funding payments would be unsustainable without this extension in 
According to the agreement reached with the federal government, new 
regulations will be adopted under the Pension Benefits Standards Act in 
respect of special payments under Air Canada's defined benefit plans to cover 
the period between 2014 to 2020 inclusive, expiring January 30, 2021. 
According to the terms of the agreement, subject to the maximum past service 
contribution permitted under the Income Tax Act for the plan year, Air Canada 
will make payments of at least $150 million annually with an average of $200 
million per year over seven years. Over this seven-year period, Air Canada 
will contribute an aggregate minimum of $1.4 billion in solvency deficit 
payments, in addition to its pension current service payments. 
During the time the regulations are in force, Air Canada will be subject to a 
series of covenants and undertakings, including no dividends and share 
repurchases, certain limitations on executive compensation arrangements and no 
pension plan benefit improvements without regulatory approval. 
Air Canada's Canadian-based unions had previously expressed their support for 
Air Canada's extension request and the arrangements are subject to 
successfully concluding a consultation process with Air Canada management and 
retiree beneficiaries. Air Canada will submit to the Office of the 
Superintendent of Financial Institutions (OSFI) all communications materials 
it intends to send to pension plan beneficiaries prior to funding the plans in 
accordance with the new regulations. 
The new funding arrangements will become effective upon the execution of 
formal documentation and the subsequent adoption of new regulations under the 
Pension Benefits Standards Act, subject to Governor in Council approval. 
In July 2009, the Government of Canada adopted the Air Canada Pension Plan 
Funding Regulations, 2009. These regulations established maximum levels of 
past service contributions (i.e. special payments to amortize the plan 
solvency deficits) to its ten domestic defined benefit registered pension 
plans in respect of the period ending January 30, 2014. During this 
five-year period, including payments required to be made in 2013, Air Canada 
will have contributed a total of $1.479 billion in past service contributions 
and in current service costs. 
Air Canada is Canada's largest domestic and international airline serving more 
than 175 destinations on five continents. Canada's flag carrier is the 15th 
largest commercial airline in the world and in 2012 served close to 35 million 
customers. Air Canada provides scheduled passenger service directly to59 
Canadian cities, 55 destinations in the United States and64 cities in 
Europe, the Middle East, Asia, Australia, the Caribbean, Mexico and South 
America. Air Canada is a founding member of Star Alliance, the world's most 
comprehensive air transportation network serving 1,329 destinations in194 
countries. Air Canada is the only international network carrier in North 
America to receive a Four-Star ranking according to independent U.K. research 
firm Skytrax that ranked Air Canada in a worldwide survey of more than 18 
million airline passengers as Best International Airline in North America in 
2012 for the third consecutive year. 
Air Canada's public communications may include 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. Forward-looking 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, 
employee and labour relations, currency exchange and interest rates, 
competition, war, terrorist acts, epidemic diseases, environmental factors 
(including weather systems and other natural phenomena and factors arising 
from man-made sources), 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 Any 
forward-looking statements contained in this news release represent Air 
Canada's expectations as of 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. 
IsabelleArthur (Montréal)514 422-5788 PeterFitzpatrick 
(Toronto)416 263-5576 AngelaMah (Vancouver)604 270-5741 
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ST: Quebec
-0- Mar/12/2013 22:56 GMT
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