Exhibit 99.1

News release via CNW Telbec, Montreal 514-878-2520

    Attention Business/Financial Editors:

    ACE Aviation Holdings Inc. reports first quarter net income of
    $118 million

    FIRST QUARTER OVERVIEW
    - Net income of $118 million compared to a net loss of $77 million in the
      first quarter 2005.
    - Operating loss of $29 million excluding special labour charges,
      compared to an operating loss in the 2005 quarter of $10 million.
    - EBITDAR for the quarter of $218 million excluding special labour
      charges, an improvement of $18 million from the 2005 quarter.
    - Passenger revenues up $282 million or 16 per cent, driven by a 9 per
      cent yield improvement and 6 per cent growth in traffic.
    - Fuel expense increase of $154 million or 37 per cent over the prior
      year's quarter.
    - Positive cash flow from operations of $364 million, an improvement of
      $50 million from the first quarter of 2005.

    MONTREAL, May 11 /CNW Telbec/ - ACE Aviation Holdings Inc. (ACE) today
reported a net income of $118 million for the first quarter 2006 compared to a
net loss of $77 million in the 2005 quarter. ACE reported an operating loss of
$29 million for the quarter, excluding special charges for labour
restructuring of $33 million, as a result of increased fuel expenses and
losses recorded at ACTS. This represented a decline of $19 million, excluding
special labour charges, from the first quarter 2005.
    Passenger revenues were up $282 million or 16 per cent reflecting
increases in all markets due to a 9 per cent improvement in passenger revenue
per revenue passenger mile (yield) and a 6 per cent growth in passenger
traffic, as measured by revenue passenger miles (RPMs). Unit cost, as measured
by operating expense per available seat mile (ASM), rose 10 per cent from the
same period in 2005. Excluding fuel expense and special labour charges, unit
cost was up 4 per cent and included the effect of growth in non-ASM producing
businesses.
    EBITDAR(1) for ACE amounted to $218 million, an improvement of
$18 million from the first quarter 2005, excluding special labour charges.
EBITDAR improvements were achieved, excluding special labour charges, in ACE's
reportable segments: Transportation Services, Aeroplan and Jazz, up
$16 million, $15 million and $22 million, respectively, with the exception of
ACTS which showed a decline of $34 million.
    "I am pleased to report a solid first quarter from a financial
perspective with important milestones achieved in the implementation of ACE's
business strategy," said Robert Milton, Chairman, President and Chief
Executive Officer, ACE Aviation Holdings Inc. "During the quarter we made
substantial progress in creating shareholder value through the successful
monetization of our regional carrier Jazz and the special distribution of
Aeroplan units intended to reward shareholders for their confidence in our
business model.
    "Air Canada's revenue performance continued to be a success story with
the airline reporting a 16 per cent increase in revenues over the previous
year in the industry's weakest quarter. Robust market demand, rising capacity,
increased load factors and higher yields all contributed to the revenue
growth. Moreover, consumers are responding with enthusiasm to our growing
range of innovative product offerings on aircanada.com such as branded fares
and multi-trip Flight Passes.
    "As expected, spiraling fuel costs had a major negative impact on the
airline's cost performance and with oil prices in excess of $70 USD a barrel
on the WTI index, we anticipate this impact to continue throughout 2006.
    "Aeroplan's strong performance exceeded expectations for the quarter with
a fifty per cent increase in operating income over the previous year. Aeroplan
is delivering on its revenue, partner and membership growth targets, expanding
rewards and improving operating efficiency, and expects to do so for the
remainder of the year.

    "I am particularly pleased with these first results reported by Jazz as a
publicly traded company following the successful completion of its IPO in
February. ACE's regional carrier - Canada's second largest airline - achieved
a net income of $33.5 million in the quarter and reduced unit costs in all
categories except fuel and aircraft rent. This impressive first quarter
performance reflects the stability inherent in its Capacity Purchase Agreement
with Air Canada.
    "ACTS, our technical services division, underperformed again this quarter
mainly due to reduced profit margins in the airframe and engine maintenance
divisions. While this is disappointing, I am optimistic that the changes being
implemented on an accelerated basis by the new leadership will result in
improved financial results within the year.
    "While the fuel cost environment remains a concern, the revenue outlook
going forward is highly encouraging and with a continued focus on controllable
costs at all ACE companies, I am satisfied that we are well positioned to
deliver a strong performance for the full year relative to the industry."

    RECENT SIGNIFICANT EVENTS
    -------------------------

    Air Canada

    In the quarter, Air Canada continued to implement its new business plan
and revenue model providing consumers simplicity, value, choice, transparency
and flexibility. Air Canada expanded its industry-leading product line of
multi-trip Flight Passes that offers customers the convenience to self manage
air travel online using pre-purchased flight credits valid for up to one year.
In addition, the carrier expanded its simplified pricing structure beyond
North America concurrent with the introduction of localized aircanada.com
websites in select international markets. Leveraging the technology available
exclusively on aircanada.com, the carrier also introduced an innovative "a la
carte" pricing discount option on select European flights, followed by the GO
Discount introduced in April on its Tango fares in North America.
    During the quarter, Air Canada launched new year-round non-stop services
between Calgary-New York JFK (March 1) and Edmonton-Montreal (March 2),
followed by Fort McMurray-St. John's via Toronto (April 8), and Edmonton-Los
Angeles (May 1). In addition, the carrier announced that it will introduce new
non-stop services in the second and third quarters between the following
cities: Toronto-Salt Lake City, Toronto-Shanghai, Montreal-Denver, Montreal-
Mexico City, Edmonton-Yellowknife, Edmonton-Victoria, Edmonton-Kelowna,
Calgary-Yellowknife, Calgary-Comox and Winnipeg-London (Ontario).
    In 2004, the Company concluded long term labour agreements with all union
groups which expire in 2009. These collective agreements provide for a wage
review process in 2006 on a no-strike, no-lock out basis with binding
arbitration as the ultimate resolution mechanism. The Company is in various
stages of discussion and negotiation with all groups and thus far,
negotiations with two major unions, the CAW and IAMAW, have moved to
mediation/arbitration.

    Aeroplan

    Aeroplan and Bell recently introduced an enhanced rewards program for
Aeroplan members and approximately seven million Bell Canada customers in
Ontario and Quebec. In addition, two prestigious non-air partners joined the
Aeroplan program in the quarter: Sol Melia Hotels and Resorts, the largest
resort hotel company in the world, became the first company to bring an all-
inclusive resorts travel style option to Aeroplan's membership base; and Le
Mridien, one of the world's leading hotel brands with more than 120 luxury
properties in 52 countries.
    In March 2006, ACE completed a special distribution of units of the
Aeroplan Income Fund to its shareholders. The record date for the purpose of
the special distribution was March 3, 2006. Based on the closing price of the
units of Aeroplan Income Fund on March 3, 2006, the value of the units
distributed to ACE's shareholders amounted to $251 million. Following the
completion of the distribution and the transfer of units in connection with
the Initial Long Term Incentive Plan of Aeroplan, ACE's ownership interest in
Aeroplan was 75.3 percent.

    Jazz

    ACE completed an initial public offering of the Jazz Air Income Fund
("the Fund") on February 2, 2006. The Fund sold 23.5 million units at a price
of $10.00 per unit for net proceeds of $218 million, net of offering costs of
$17 million which were paid during the quarter. Following the initial public
offering, the Fund issued an additional 1.5 million units from the exercise of
an over-allotment option for net proceeds of approximately $14 million
bringing the aggregate net proceeds of the offering to approximately
$232 million. Following the completion of this offering, ACE's ownership
interest in Jazz was 79.7 percent. The net proceeds were distributed to ACE
and ACE will use the proceeds for general corporate purposes. In addition, a
$150 million secured syndicated credit facility was established of which
approximately $115 million ($113 million, net of fees of $2 million) was drawn
by Jazz on closing of the offering.

    ACTS

    On April 20, 2006, ACTS announced a number of executive appointments and
a realignment of the senior management structure that supports the strategic
business objectives of the business. ACTS is currently completing a thorough
review of its operations, including contract profitability. Cash management,
cost reduction and increased productivity are top priorities. Considerable
focus is also being directed on the full evaluation of systems and processes
and potentially the implementation of an Enterprise Resource Planning ("ERP")
system which will allow ACTS to become more responsive and competitive, while
enhancing profit margins and improving customer satisfaction.
    On April 25, 2006, ACTS announced it had secured a ten-year agreement
with JetBlue Airways for component maintenance support of JetBlue's Airbus
A320 fleet. The agreement represents an estimated value of USD$200 million
over the ten-year period.

    US Airways

    On April 10, 2006, the Corporation announced that it had entered into an
agreement to sell 1.75 million shares of its holdings in US Airways Group,
Inc. (US Airways) to PAR Investment Partners LP. The net proceeds from the
sale transaction on closing on April 13, 2006 amounted to $78 million
(US$68 million) which represents 90 percent of the Corporation's original
investment in US Airways of US$75 million in September 2005. ACE continues to
hold 3.25 million shares, representing approximately 3.8 percent of the equity
in US Airways.

    (1) Non-GAAP Measures

    EBITDAR is a non-GAAP financial measure commonly used in the airline
industry to assess earnings before interest, taxes, depreciation and aircraft
rent. EBITDAR is used to view operating results before aircraft rent and
depreciation, amortization and obsolescence as these costs can vary
significantly among airlines due to differences in the way airlines finance
their aircraft and other assets. EBITDAR is not a recognized measure for
financial statement presentation under GAAP and does not have a standardized
meaning and is therefore not comparable to similar measures presented by other
public companies. Readers should refer to Consolidated Highlights or ACE's
Quarter 1 2006 Management's Discussion and Analysis (MD&A) for a
reconciliation of EBITDAR, excluding special charges, to operating income
(loss).
    For further information on ACE's public disclosure file, including ACE's
Annual Information Form, please consult SEDAR at www.sedar.com and EDGAR at
www.sec.gov/edgar.shtml

    CAUTION REGARDING FORWARD-LOOKING INFORMATION

    Certain statements in this news release may contain forward-looking
statements. These forward-looking statements are identified by the use of
terms and phrases such as "anticipate", "believe", "could", "estimate",
"expect", "intend", "may", "plan", "predict", "project", "will", "would", and
similar terms and phrases, including references to assumptions. Such
statements may involve but are not limited to comments with respect to
strategies, expectations, planned operations or future actions. 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. Such
statements involve known and unknown risks, uncertainties and other factors
that may cause the actual results, performance or achievements to differ
materially from those expressed in the forward-looking statements. Results
indicated in forward-looking statements may differ materially from actual
results for a number of reasons, including without limitation, energy prices,
general industry, market and economic conditions, war, terrorist attacks,
changes in demand due to the seasonal nature of the business, the ability to
reduce operating costs and employee counts, employee relations, labour
negotiations or disputes, restructuring, pension issues, currency exchange and
interest rates, changes in laws, adverse regulatory developments or
proceedings, pending and future litigation and actions by third parties as
well as the factors identified throughout ACE's filings with securities
regulators in Canada and the United States and, in particular, those
identified in the Risk Factors section to ACE's 2005 MD&A dated February 9,
2006. The forward-looking statements contained herein represent ACE's
expectations as of the date they are made and are subject to change after such
date. However, ACE disclaims any intention or obligation to update or revise
any forward-looking statements whether as a result of new information, future
events or otherwise.

    <<
    ACE AVIATION
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Consolidated
    HIGHLIGHTS
                                        Quarter 1   Quarter 1
                                             2006        2005
    -------------------------------------------------------------------------
    Financial (Canadian dollars in
     millions unless stated otherwise)                           $ Change
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Operating revenues                      2,484       2,177         307
    Operating loss                            (62)        (10)        (52)
    Non-operating income (expense)            169         (63)        232
    Income (loss) before non-
     controlling interest, foreign
     exchange and recovery of
     income taxes                             107         (73)        180
    Income (loss) for the period              118         (77)        195
    Operating margin                         (2.5)%      (0.5)%      (2.0)pp
    EBITDAR (1)                               185         200         (15)
    EBITDAR, excluding special
     labour charges (1)                       218         200          18
    EBITDAR margin                            7.4 %       9.2 %      (1.8)pp
    Cash, cash equivalents and
     short-term investments                 2,629       1,785         844
    Cash flows from operations                364         314          50
    Weighted average common shares
     used for computation - basic             102          89
    Weighted average common shares
     used for computation - diluted           110          89
    Earnings (loss) per share
     - basic                                $1.15      ($0.87)
    Earnings (loss) per share
     - diluted                              $1.12      ($0.87)

    -------------------------------------------------------------------------
    Operating Statistics                                         % Change
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Revenue passenger miles
     (millions) (RPM)                      11,240      10,586           6
    Available seat miles
     (millions) (ASM)                      14,287      13,566           5
    Passenger load factor                    78.7 %      78.0 %       0.7 pp
    Passenger revenue yield per
     RPM (cents)                             17.9        16.4           9
    Passenger revenue per ASM (cents)        14.1        12.8          10
    Operating revenue per ASM (cents)        17.4        16.0           8
    Operating expense per ASM (cents)        17.8        16.1          10
    Operating expense per ASM,
     excluding fuel expense (cents)          13.8        13.1           6
    Operating expense per ASM,
     excluding fuel expense and
     special labour charges
     (cents) (2)                             13.6        13.1           4
    Average number of full-time
     equivalent (FTE) employees
     (thousands)                             33.0        31.6           4
    Available seat miles per FTE
     employee (thousands)                   433.4       429.0           1
    Operating revenue per FTE
     employee (thousands)                   $75.3       $68.8           9
    Aircraft in operating fleet at
     period end (3)                           328         293          12
    Average aircraft utilization
     (hours per day) (4)(5)                  10.1        10.4          (3)
    Average aircraft flight length
     (miles) (5)                              861         862           0
    Fuel price per litre (cents) (6)         63.6        49.3          29
    Fuel litres (millions)                    890         837           6
    -------------------------------------------------------------------------

    (1) EBITDAR (earnings before interest, taxes, depreciation, amortization
        and obsolescence and aircraft rent) is a non-GAAP financial measure
        commonly used in the airline industry to view operating results
        before aircraft rent and depreciation, amortization and obsolescence
        as these costs can vary significantly among airlines due to
        differences in the way airlines finance their aircraft and other
        assets. EBITDAR is not a recognized measure for financial statement
        presentation under GAAP and does not have a standardized meaning and
        is therefore not likely to be comparable to similar measures
        presented by other public companies.

    EBITDAR is reconciled to operating income (loss) as follows:

    ($ millions)
                                                    Quarter 1   Quarter 1
                                                         2006        2005
                                                 ----------------------------
    Operating income (loss)                               (62)        (10)
    Add back:
      Aircraft rent                                       113          90
      Depreciation, amortization & obsolescence           134         120
                                                 ----------------------------
    EBITDAR                                               185         200
                                                 ----------------------------
    Add back:
      Special labour charges                               33           -
                                                 ----------------------------
    EBITDAR excluding labour charges                      218         200
                                                 ----------------------------
                                                 ----------------------------

    (2) Special labour charges of $33 million were recorded in Quarter 1
        2006. Operating expense per available seat mile, excluding fuel
        expense and special labour charges, is calculated as operating
        expense, removing fuel expense and special labour charges, divided by
        ASMs. Refer to section 12 "Non-GAAP Financial Measures" of ACE's
        Quarter 1 2006 MD&A for additional information.
    (3) Operating fleet excludes three chartered freighters in 2006 and one
        chartered freighter in 2005.
    (4) Excludes maintenance down-time.
    (5) Excludes third party carriers operating under capacity purchase
        arrangements.
    (6) Includes fuel handling and fuel hedging expenses.
    >>
    %SEDAR: 00020954EF          %CIK: 0000861959

    /For further information:Isabelle Arthur, (Montral), (514) 422-5788;
Peter Fitzpatrick, (Toronto), (416) 263-5576; Angela Mah, (Vancouver), (604)
270-5741; aircanada.com;
Archived images on this organization are searchable through CNW Photo Archive
website at http://photos.newswire.ca. Images are free to accredited members/
    (ACE.A. ACE.B.)

CO:  AIR CANADA; AIR CANADA - CORPORATE - FINANCIAL; ACE AVIATION HOLDINGS
     INC.

CNW 06:00e 11-MAY-06