Transat welcomes C.D. Howe Institute study on the burden imposed on Canada’s air transport industry.

Montreal, February 8, 2007

“Our future depends on a reform whose urgency has become obvious, since the Canadian model is perceived to be ineffective and inequitable,” says Jean-Marc Eustache. Transat A.T. Inc., one of the world’s largest integrated tourism companies and Canada’s holiday travel leader, welcomes the study just released by the C.D. Howe Institute, which concludes that Canada's current economic and tax policy framework imposed on airlines and their customers is both inequitable and ineffective.

"The C.D. Howe Institute — just like the Montreal Economic Institute before it — has shown us that the existing economic and tax policy framework, including airport rents and other tax or rate policies, distorts competition to the detriment of Canadian air carriers," said Jean-Marc Eustache, President and Chief Executive Officer of Transat. "A significant overhaul of this system is absolutely essential: our future depends on it. The first — and especially urgent — step would be an immediate reduction in the levy that the government imposes on the industry and on travellers through ‘rents’ charged to airports."

Transat believes that a sound economic and tax policy framework is essential for the Canadian air transport industry to thrive and be globally competitive. Certain costs imposed on the carriers are out of control and, in some cases, have risen astronomically in the last decade. This situation poses the single greatest threat to the viability, competitiveness and ultimate success of Canada's air carriers.

Transat A.T. Inc. is an integrated international tour operator with more than 60 destination countries and that distributes products in over 50 countries. A holiday travel specialist, Transat operates mainly in Canada and Europe, as well as in the Caribbean, Mexico and the Mediterranean Basin. Montreal-based Transat is also active in air transportation, destination services and distribution. (TSX: TRZ.B, TRZ.A)

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