Exhibit 99.1

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

    Attention Business/Financial Editors:
    ACE Aviation Holdings Inc. announces a proposed plan of arrangement and
    an initial distribution of units of Aeroplan Income Fund to its
    shareholders under the plan

    MONTREAL, Aug. 31 /CNW Telbec/ - ACE Aviation Holdings Inc. (ACE)
announced today that it has received approval of the Superior Court of Qubec
to call a special meeting of its shareholders in order to propose a statutory
arrangement pursuant to the Canada Business Corporations Act. The arrangement
would grant authority to the board of directors of ACE to make from time to
time one or more special distributions in an aggregate amount of up to
$2 billion by way of reduction of the stated capital of the Class A variable
voting shares, Class B voting shares and the preferred shares of ACE.
    ACE shareholders as of the close of business on September 1, 2006 will be
entitled to receive notice of the special meeting and to vote at the meeting
which will be held on October 5, 2006. A management proxy circular providing
details with respect to the proposed plan of arrangement will be mailed to
shareholders and will be available on ACE's website at www.aceaviation.com or
at www.sedar.com.
    ACE also intends to proceed with an initial distribution of units of
Aeroplan Income Fund (TSX: AER.UN) under the plan of arrangement representing
a portion of its interest in Aeroplan. The initial distribution is subject to
the prior receipt of an advance income tax ruling or opinion from the Canada
Revenue Agency confirming that the distribution will be treated as a return of
capital. It is anticipated that the initial distribution will be completed by
the end of 2006. The remaining terms of the distribution, including the number
of Aeroplan units to be distributed per Class A variable voting share, Class B
share and preferred share (on an as-converted basis) of ACE, the record date
to determine the ACE shareholders eligible to participate in such distribution
and the anticipated payment date will be announced by subsequent news release
after receipt of the tax ruling or opinion.
    Due to restrictions applicable to Aeroplan Income Fund pursuant to United
States securities legislation, U.S. shareholders will receive Aeroplan units
only if they complete and submit a certification attesting that they are
"qualified purchasers" for the purposes of the United States Investment
Company Act of 1940 and institutional "accredited investors" for the purposes
of Rules 501(a)(1), (2), (3) or (7) of Regulation D under the United States
Securities Act of 1933. U.S. shareholders that do not satisfy such
requirements or that do not submit a properly completed certification on or
prior to a date to be specified by subsequent news release will receive the
net cash proceeds of the sale on their behalf of the Aeroplan units which such
shareholders would otherwise have been entitled to receive.
    ACE has requested an advance income tax ruling from the Canada Revenue
Agency confirming that, from a Canadian tax standpoint, the special
distribution will be treated as a return of capital and not as a taxable
dividend. If the initial distribution of Aeroplan units is treated as a return
of capital, the distribution will not give rise to immediate taxation but the
adjusted cost base to ACE shareholders of their ACE shares for Canadian tax
purposes will be reduced by an amount equal to the fair market value, as of
the record date for the distribution, of the Aeroplan units distributed to ACE
shareholders or sold on their behalf.
    ACE shareholders who have questions concerning the proposed plan of
arrangement and the distribution of Aeroplan units may contact ACE's Investor
Relations department at (514) 422-7837, or CIBC Mellon Trust Company, ACE's
transfer agent and registrar at 1-800-387-0825.

    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, general uncertainties of the business and matters
that are not within the control of ACE. 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. The completion of the transactions
described in this news release is conditional upon the satisfaction of certain
conditions precedent, including shareholder approval, approval by the Qubec
Superior Court and receipt of an advance income tax ruling or opinion
confirming that the initial distribution of Aeroplan units will be treated as
a return of capital. 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, except as required under applicable
securities regulations.
    %SEDAR: 00020954EF          %CIK: 0001295721

    /For further information: Isabelle Arthur (Montral), (514) 422-5788;
Peter Fitzpatrick (Toronto), (416) 263-5576; Angela Mah (Vancouver), (604)
270-5741; Internet: www.aceaviation.com/
    (ACE.A. ACE.B.)

CO:  ACE AVIATION HOLDINGS INC.

CNW 16:14e 31-AUG-06