Air Canada — Capital/Financing Update 2020

May 28, 2020

AIR CANADA

TREASURY OFFERING OF CLASS A VARIABLE VOTING SHARES AND/OR CLASS B VOTING SHARES

May 27, 2020

A final short-form prospectus of the Company dated May 27, 2020 containing important information relating to the securities described in this document has been filed with the securities regulatory authorities in each of the provinces and territories of Canada. A copy of the final short-form prospectus, and any amendment, is required to be delivered to any investor with this document.

The securities described in this document have not been and will not be registered under the U.S. Securities Act 1933, as amended (the "Securities Act") or any U.S. state securities laws. Accordingly, the securities described herein will not be offered in the United States except to persons reasonably believed to be qualified institutional buyers, as defined under Rule 144A of the Securities Act, in reliance on exemptions from registration provided under the Securities Act and the rules thereunder.

This document does not provide full disclosure of all material facts relating to the securities offered. Investors should read the final short-form prospectus and any amendment for disclosure of those facts, especially risk factors relating to the securities offered, before making an investment decision.

ISSUER:	Air Canada (the “Company”)
ISSUE:	30,800,000 Class A Variable Voting Shares and/or Class B Voting Shares of the
	Company (“Shares”).
**AMOUNT: **	C$500,500,000.
ISSUEPRICE:	C$16.25 per Share.
OVER-ALLOTMENT	The underwriters will have an option to purchase up to an additional 15% of the Issue at
**OPTION: **	the Issue Price to cover over-allotments, exercisable in whole or in part at any time until
	30 days after Closing.
**USE OFPROCEEDS: **	The net proceeds of this offering and the concurrent convertible notes offering will be
	used to supplement the Company's working capital and other general corporate purposes
	and will serve to increase the Company's cash position, thereby allowing for additional
	flexibility both from an operational standpoint and in the implementation of its planned
	mitigation and recovery measures in response to the COVD-19 pandemic.
CONCURRENT	Concurrent with this offering of Shares, the Company will issue US$650 million
CONVERTIBLENOTES	aggregate principal amount of convertible senior unsecured notes (“Convertible Notes”)
**OFFERING: **	on a marketed private placement basis. The Convertible Notes will bear interest semi-
	annually in arrears at a rate of 4.000% per annum and will mature on July 1, 2025, unless
	earlier repurchased, redeemed or converted. The initial conversion rate of the Convertible
	Notes is 65.13 Class A Variable Voting Shares and/or Class B Voting Shares of the
	Company per US$1,000 principal amount of Convertible Notes (“Conversion Shares”),
	or an initial conversion price of approximately US$15.35 per Conversion Share. The
	Convertible Notes will be convertible into cash, Conversion Shares or a combination
	thereof, at the Company's election.
	The Company has granted the initial purchasers of the Convertible Notes an option to
	purchase up to an additional 15% of the Convertible Notes.
PROSPECTUS	The first sentence of the sixth bullet on page 9 of the preliminary short-form prospectus
**INFORMATION: **	of the Company dated May 26, 2020 relating to this offering related to monthly cash burn
	is restated as follows: “Air Canada experienced a net cash burn of approximately $688
	million in March 2020, or approximately $22 million per day.”
	Other information (including financial information) presented in the preliminary short-
	form prospectus is deemed to have changed to the extent affected by the changes
	described herein.
CANADIAN/ NON-	Canadians (as defined by the_Canada Transportation Act_) will receive Class B Voting
CANADIAN	Shares. Non-Canadians (as defined by the_Canada Transportation Act_) will receive Class
**PURCHASERS: **	A Variable Voting Shares.

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AIR CANADA

AIRCANADA	AIRCANADA
TREASURYOFFERING OFCLASSA VARIABLEVOTINGSHARES
**AND/ORCLASSB **	VOTINGSHARES May 27, 2020
**FORM OFOFFERING: **	Marketed public offering in all provinces and territories of Canada by way of a short-
	form prospectus.
	Private placement in the United States to “qualified institutional buyers” pursuant to Rule
	144A of the U.S. Securities Act of 1933.
LISTING:	Air Canada Class B Voting and Class A Variable Voting Shares are listed on the Toronto
	Stock Exchange (“TSX”) under the symbol “AC”.
	The Shares have been conditionally approved for listing on the TSX. Listing of the Shares
	will be subject to the Company's fulfilment of all of the listing requirements of the TSX.
**ELIGIBILITY: **	The Class B Voting Shares will be eligible for RRSPs, RRIFs, RESPs, RDSPs, TFSAs
	and DPSPs.
ACTIVE	TD Securities Inc., J.P. Morgan Securities Canada Inc. and Citigroup Global Markets
**BOOKRUNNERS: **	Canada Inc.
**UNDERWRITINGFEE: **	4.00%.
**CLOSING: **	June 2, 2020.

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