Air Canada — Capital/Financing Update 2020

Dec 16, 2020

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

December 16, 2020

AIR CANADA

An amended and restated preliminary short-form prospectus of the Company dated December 16, 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 amended and restated preliminary short-form prospectus, and any further amendment, is required to be delivered to any investor with this document. The amended and restated 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, the amended and restated preliminary short-form prospectus and 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:	35,420,000 Class A Variable Voting Shares and/or Class B Voting Shares of the
	Company (“Shares”).
**AMOUNT: **	C$850,080,000.
ISSUEPRICE:	C$24.00 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 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 COVID-19 pandemic.
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.
**FORM OFOFFERING: **	Overnight 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 Company has applied to list the Shares 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., Citigroup Global Markets Canada
**BOOKRUNNERS: **	Inc. and Morgan Stanley Canada Limited
**UNDERWRITINGFEE: **	4.00%.
**CLOSING: **	December 30, 2020.

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