Air Canada — Capital/Financing Update 2020

Dec 16, 2020

December 15, 2020

AIR CANADA

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

A preliminary short-form prospectus of the Company dated December 15, 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 preliminary short-form prospectus, and any amendment, is required to be delivered to any investor with this document. The preliminary short-form prospectus is still subject to completion. There will not be any sale or any acceptance of an offer to buy the securities until a receipt for the final short-form prospectus has been issued.

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 preliminary short-form prospectus, 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.

A preliminary short-form prospectus of the Company dated Decembdocument has been filed with the securities regulatory authorities iprospectus, and any amendment, is required to be delivered to anycompletion. There will not be any sale or any acceptance of an offerThe securities described in this document have not been and will noany U.S. state securities laws. Accordingly, the securities describedbe qualified institutional buyers, as defined under Rule 144A of theAct and the rules thereunder.This document does not provide full disclosure of all material facprospectus, final short-form prospectus and any amendment for dimaking an investment decision.ISSUER:Air Canada (the “ComISSUE:● Class A Variable(“Shares”).**AMOUNT: **Approximately C$850ISSUEPRICE:C$● per Share.OVER-ALLOTMENT**OPTION: **The underwriters willthe Issue Price to cove30 days after Closing.**USE OFPROCEEDS: **The net proceeds of tcapital and other gencash position, therebstandpoint and in the iresponse to the COVICANADIAN/ NON-CANADIAN**PURCHASERS: **Canadians (as definedShares. Non-CanadianA Variable Voting Sh**FORM OFOFFERING: **Overnight marketed pa short-form prospectPrivate placement in t144A of the U.S. Secu	A preliminary short-form prospectus of the Company dated Decembdocument has been filed with the securities regulatory authorities iprospectus, and any amendment, is required to be delivered to anycompletion. There will not be any sale or any acceptance of an offerThe securities described in this document have not been and will noany U.S. state securities laws. Accordingly, the securities describedbe qualified institutional buyers, as defined under Rule 144A of theAct and the rules thereunder.This document does not provide full disclosure of all material facprospectus, final short-form prospectus and any amendment for dimaking an investment decision.ISSUER:Air Canada (the “ComISSUE:● Class A Variable(“Shares”).**AMOUNT: **Approximately C$850ISSUEPRICE:C$● per Share.OVER-ALLOTMENT**OPTION: **The underwriters willthe Issue Price to cove30 days after Closing.**USE OFPROCEEDS: **The net proceeds of tcapital and other gencash position, therebstandpoint and in the iresponse to the COVICANADIAN/ NON-CANADIAN**PURCHASERS: **Canadians (as definedShares. Non-CanadianA Variable Voting Sh**FORM OFOFFERING: **Overnight marketed pa short-form prospectPrivate placement in t144A of the U.S. Secu				the securities described in thisy of the preliminary short-formm prospectus is still subject torm prospectus has been issued.ended (the "Securities Act") orpersons reasonably believed ton provided under the Securitiesad the preliminary short-formo the securities offered, beforeShares of the Company	the securities described in thisy of the preliminary short-formm prospectus is still subject torm prospectus has been issued.ended (the "Securities Act") orpersons reasonably believed ton provided under the Securitiesad the preliminary short-formo the securities offered, beforeShares of the Company	the securities described in thisy of the preliminary short-formm prospectus is still subject torm prospectus has been issued.ended (the "Securities Act") orpersons reasonably believed ton provided under the Securitiesad the preliminary short-formo the securities offered, beforeShares of the Company
		er 15, 2n each oinvestoto buy tt be regihereinSecuritiets relatisclosure	020 containing important information relating tof the provinces and territories of Canada. A copr with this document. The preliminary short-forhe securities until a receipt for the final short-fostered under the U.S. Securities Act 1933, as amwill not be offered in the United States except tos Act, in reliance on exemptions from registrationg to the securities offered. Investors should reof those facts, especially risk factors relating t
	ISSUER:Air Canada (the “ComISSUE:● Class A Variable(“Shares”).**AMOUNT: **Approximately C$850ISSUEPRICE:C$● per Share.OVER-ALLOTMENT**OPTION: **The underwriters willthe Issue Price to cove30 days after Closing.**USE OFPROCEEDS: **The net proceeds of tcapital and other gencash position, therebstandpoint and in the iresponse to the COVICANADIAN/ NON-CANADIAN**PURCHASERS: **Canadians (as definedShares. Non-CanadianA Variable Voting Sh**FORM OFOFFERING: **Overnight marketed pa short-form prospectPrivate placement in t144A of the U.S. Secu	panyVotin	”)g Shares and/or	Class B Voting	Shares of the C	ompany
		milli	on.
		haver ove his oferal coy allo	an option to purcr-allotments, exefering will be urporate purposewing for additi	hase up to an addrcisable in wholesed to supplemens and will serve tonal flexibility b	itional 15% of theor in part at any tit the Company'so increase the Cooth from an op	Issue atme untilworkingmpany'serational
		mple	mentation of its p	lanned mitigation	and recovery me	asures in
		D-19by ths (as	pandemic.e_Canada Trans_efined b the_Ca_	portation Act) wnada Transorta	ill receive Class Bion Act) will recei	Votingve Class
		ares.ublic	y offering in all pr	povinces and territ	ories of Canada b	way of
		us.he United States to “qualified institutional buyers” pursuant to Rulerities Act of 1933.
	LISTING:Air Canada Class B Voting and Class A Variable Voting Shares are listed on the TorontoStock Exchange (“TSX”) under the symbol “AC”.The Company has applied to list the Shares on the TSX. Listing of the Shares will besubject 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, TFSAsand DPSPs.ACTIVE**BOOKRUNNERS: **TD Securities Inc., J.P. Morgan Securities Canada Inc., Citigroup Global Markets CanadaInc. and Morgan Stanley Canada Limited**UNDERWRITINGFEE: **4.00%.ANTICIPATED**PRICINGDATE: **December 16, 2020.

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

December 15, 2020

AIR CANADA

CLOSING: December 30, 2020.

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