Caution Regarding Forward-Looking Information / Non-GAAP Measures

Outlook provided in today’s presentations constitutes forward-looking information within the meaning of applicable securities laws, is based on a number of assumptions, including those discussed during today’s presentations, and is subject to a number of risks and uncertainties. Today’s presentations also include references to non-GAAP measures, such as Adjusted Pre-Tax Income, EBITDA margins, Return on Invested Capital, Free Cash Flow and Leverage Ratio. Please refer to this morning’s press release for additional information on non- GAAP measures and cautionary statements relating to forward-looking information, as well as major assumptions relating to our financial targets. Our Transformation in Progress

Calin Rovinescu President and Chief Executive Officer

Michael Rousseau

Deputy Chief Executive Officer and Chief Financial Officer

5 Lucie Guillemette

Executive Vice President and Chief Commercial Officer

6 Craig Landry

Executive Vice President, Operations

7 Arielle Meloul-Weschler

Senior Vice President, People, Culture and Communications

8 Catherine Dyer

Senior Vice President and Chief Information Officer

9 Mark Galardo

Vice President, Network Planning

10 Mark Nasr

Vice President, Loyalty and eCommerce

11 12 Celebrating our 82nd year Sustainable profitability

✓ Record financial results ✓ Diversified network ✓ Record revenues ✓ Record liquidity levels ✓ Improved cost structure ✓ Pension plan surplus ✓ Strong balance sheet ✓ Stable long-term labour agreements ✓ Improved financial leverage ✓ Heading towards investment grade ✓ Lower risk profile

14 Revenue generation and cost control

• Record revenues • Continued cost discipline

15 Strengthened Balance Sheet and lowered Risk Profile

Pension Plan Surplus (Deficit) $ Billions Unrestricted Liquidity 7

$ Billions 6 5.73 2.4* 2 5 1 4.18 0 4 3.39 -1 2.97 -2 2.69 3 2.36 -3 -4 2 -5 (4.2) Jan 1, 2012 Jan 1, 2019 1 Effectively restructured pension plans, and now in a 0 significant surplus position 2013 2014 2015 2016 2017 2018 *Based on preliminary estimates at Jan. 1, 2019

16 Capacity growth aimed at international markets 5-year Total Capacity Growth

+62% 82% International Capacity Growth since 2013

Share of total capacity

International North America 38% North America Capacity Growth since 2013 2013 2014 2015 2016 2017 2018

17 Culture change

18 Enhanced customer experience

19 Global champion

20 Privileged geography

Unrivalled access to the largest air travel market in the world International traffic flows remain a cornerstone of our strategy

21 International transit traffic

15% 142% growth in 2018 growth in 2018 over 2017 over 2013

22 Fleet renewal program

Fleet

Boeing 787 29% CASM advantage over the

Boeing 737 MAX 11% CASM advantage over the Airbus A320

Airbus A220 12% CASM advantage over the Embraer E190

23 Since 2013 Carried nearly 30M customers serving 70 destinations on 5 continents

24 Exceptional growth ✓Domestic Canada holiday packages ✓New booking system ✓Customer-friendly ‘Hotel’ tab

25 Strong airline partnerships offering our customers more choice

• Founding member of • Joint Ventures with and the Group over the Atlantic, and over the Pacific • Codeshare and interline agreements with almost 90 airlines

26 Record operating revenue

CAGR (in millions $) +11% 18,065 +7.8% 16,252 14,667 13,868 +46% 13,272 12,382

2013 2014 2015 2016 2017 2018

Strong revenue results driven by leveraging our competitive advantages

27 Record 50.9M passengers Up 5.8% Up 42% from 2017 from 2013

28 Continued profitability Consistent with EBITDAR and EBITDAR Margin previously forecasted EBITDAR margin guidance

EBITDAR Margin % $ Millions 20 4,000 18.3 18.9 18.0 18 15.8 3,500

16 12.6 3,000 14 11.6 2,500 12

10 2,000

8 1,500 2,768 2,928 2,851 6 2,542 1,000 4 1,671 1,433 500 2

0 0

2013 2014 2015 2016 2017 2018 EBITDAR (excluding special items) EBITDAR Margin (excluding special items)

29 Cost Transformation Program

$220M savings realized or identified in 2018

30 Strategy increases value Share price up over 1,300% since 2013 and over 4,000% since April 1, 2009

Over $9 billion in Historical Share Price* shareholder value Feb. 22,2019 $ 33.14 Jan. 8, 2018 $ 23.88 (+39%) created since June 1, 2015 $ 14.19 (+134%) June 7, 2013 $ 2.27 (+1,360%) Apr. 1, 2009 April 1, 2009 $ 0.78 (+4,149%)

*Increases based on Feb. 22, 2019 closing share price of $33.14

31 Continued international growth 2018 NEW ROUTES

Air Canada to Paris Vancouver to Zurich to Dublin Montreal to Tokyo-Narita to Shannon

Air Canada Rouge Montreal to Montreal to Lisbon Toronto to Bucharest Toronto to Porto Toronto to Zagreb

32 Engaged workforce

33 34 New reservation system

• Improved customer service • Enhanced operational efficiency • Over $100M in annual incremental benefits

35 36 NEW: Industry-leading loyalty program 2020

• Leveraging technology and analytics for an enhanced customer experience • Immediate value to Air Canada and to our customers

37 Data: the new currency of business

38 SIGNATURE SUITE Wi-Fi

Investing in our products to improve the customer experience A220

39 Network optimization

40 41 Amended CPA provides significant value

42 Competitive Culture

Arielle Meloul-Weschler Senior Vice President, People, Culture and Communications We’ve come a long way Communication is key to success Training and tools

46 Talent acquisition and attracting talent

Great results: • Smarter hires • Less turnover • More efficient interviews

47 Future of work and reskilling

48 Innovative talent development

Emerging leaders program – Leading the AC Way • On-line leadership training • Mentoring • Real-world project assignment

49 Diversity and Inclusion

50 51 52 Summary

We continue to transform and evolve, so do our people strategies.

We are: ✓ Communicating transparently ✓ Staying ahead of the war for talent and continuing to nurture our ✓ Ensuring that we continue to labour stability “do good” in addition to “doing well” ✓ Investing in our people through better tools, programs and training

53 Operations

Craig Landry Executive Vice President, Operations 2018 operational results

574,765 83.3% 217 22 50.9M FLIGHTS LOAD FACTOR NUMBER OF NEW AIRCRAFT CUSTOMERS DESTINATIONS INTEGRATED +5.8% SERVED INTO FLEET SINCE 2017 WORLDWIDE Single day record 182,552 customers carried (AUG. 20, 2018)

56 Operations Excellence Cost transformation

Technology and innovation Elevating the customer experience

57 Operations Excellence

Safety • Engrained in our DNA • Robust Safety Management System and Standard Operating Procedures

58 Operations Excellence – Transforming our fleet

Integrating new aircraft Boeing 737 MAX • 18 aircraft to enter the fleet in 2019 A220 • First aircraft to enter the fleet in 2019

Aircraft reconfigurations A330 conversions • To be completed by summer 2020 Ongoing Wi-Fi installations and livery paint programs Cost Transformation Program

✓ 150 cost savings initiatives identified in the operation ✓ $58M of cost savings realized Focus for 2019 ✓ Already identified $72M cost savings opportunities for 2019

Figures on the slide relate to initiatives in the operation only, in support of the overall target of $250M savings across the airline

60 “Super A” Checks

Reduced Boeing 767 hangar visits by 17% (300 trips) in 2018

61 Technology and innovation in the operation

New reservation system will ✓ Simplify ✓ Automate ✓ Improve the customer journey

62 Technology and innovation in the operation Mobility in the operation

Introducing the potential of a truly connected operation

63 Technology and innovation

First airline in the world to install dual-heads up display on the Boeing 737 MAX

64 Elevating the customer experience

In-Flight Service: Enhanced focus on quality and consistency of service delivery

65 Elevating the customer experience

Transiting customers: • Our transit process is a competitive advantage • Reduced number of steps for customers connecting at our hubs • Expedited security and customs • Most transiting customers are not required to collect their bags

66 Systems Operations Control

67 Summary

✓ Operations Excellence ✓ Cost transformation ✓ Technology and innovation ✓ Elevating the customer experience

68 How Air Canada Continues to Win

Lucie Guillemette Executive Vice President and Chief Commercial Officer Customer Service Excellence How we will continue to win Leveraging our competitive advantages

COMPREHENSIVE NETWORK STRONG BRANDS MODERN AND EFFICIENT AND SCHEDULE FLEET

STRONG POSITIONING WORLD CLASS PREMIUM FOUNDATIONAL OF PRIMARY HUBS PRODUCTS RELATIONSHIPS

71 Competitive landscape

• Industry demand remains strong • Competition is aspiring to win over premium customers • ULCCs have entered the domestic marketplace How we will continue to win Next stage in our transformation

IN-HOUSE LOYALTY PROGRAM NEW RESERVATION SYSTEM BOEING 787, BOEING 737 MAX AIRBUS A220

NEXT GENERATION REVENUE OPTIMIZATION ENHANCED JOINT VENTURE AGREEMENTS

73 Strong, global brand

74 Seamless end-to-end travel experience Airport product enhancements

76 Onboard product enhancements

77 Enhancing our Economy Class product

• International economy meal refresh • Evolving buy-on- board offering • Enhanced family travel programs FIRST CANADIAN CARRIER WITH ABILITY TO STREAM

Cabin enhancements focused on product consistency

79 Passenger revenue growth and efficiency Targeting profitable growth

18,000 23% 16,000 +47%

14,000 18% 12,000 14.66% 11.61% 11.17% 10,000 13%

8,000 7.81% 9.39%

Revenue ($ Million) ($ Revenue 8%

6,000 10.99% Growth Capacity 3.00% 5.86% 7.10% 7.10% 4,000 5.22% *Air Canada adopted 3% accounting standard IFRS 15 - Revenue 1.90% from Contracts with

Passenger 2,000 Customers effective January 1, 2018. Amounts for periods 0 -2% prior to 2017 have not been restated for the 2013 2014 2015 2016 2017 2018 adoption of this new Passenger Revenue ASM Growth % Passenger Revenue Growth % accounting standard.

80 Transforming revenue optimization A key piece of our revenue growth

• Origin-destination controls far exceeded expectations • Point of convergence between – Data – Pricing – Inventory – Distribution • Opportunities to dynamically price seats and ancillaries • Powered by advanced analytics Enhanced economy fare offering

Key driver of new revenue-generating opportunities

Realized $250M in combined benefits* since implementing expanded range of economy fares

*Ancillary growth from unbundled brands and upsell to higher brands Ancillary revenue

+13% 2018 ancillary growth over 2017 Key strategic tool

Enables us to • Compete effectively in leisure markets • Swing capacity from sun markets in the winter to the transatlantic in the summer • Effectively defend against ULCCs within Canada Undertaking initiatives to further enhance the Rouge customer experience • Digital Transformation – Brand new web platform – New hotel tab • Diversified business model – Increase in European and domestic Canada destinations +59% Revenue growth since 2015

$803M 2018 Revenue

+13% YOY compared to 2017 Summary

Positioned well to win now and into the future

✓ Comprehensive network and ✓ World class premium products schedule ✓ Strong foundational relationships: ✓ Strong global brand Star Alliance and joint ventures ✓ Modern and efficient fleet ✓ Industry-leading in-house loyalty ✓ Revenue optimization processes program and capabilities

87 Evolution of our Fleet and Network

Mark Galardo Vice President, Network Planning The Air Canada network Unparalleled growth since 2009

116% Seat Growth 64 New Destinations 123% Seat Growth 55 U.S. (48 International) Destinations

219 Destinations

89 Growing profitably – Air Canada system wide Air Canada capacity has grown 87% since 2009

120 20.0

18.0 100 PLF PLF 83.3% 16.0 82.3% PLF 14.0 80 82.5% PLF PLF 83.5% 12.0 83.4% 60 10.0 PLF 80.7% Cents 8.0 40

6.0 RPMs & ASMs (Billions) ASMs & RPMs 4.0 20 2.0

- - 2009 2014 2015 2016 2017 2018 PLF = Passenger Load Factor RPMs ASMs PRASM Yield

90 Network diversification strategy Enabling decrease in overall risk while profitably growing International and U.S. revenues

Share of Capacity Share of Revenues*

30% 23%

22% 28% 23% 27% 30% 28% 23% 27% 20% 21% 25% 21% 17% 19% 18% 17% 29% 30% 27% 22% 38% 34%

2012 2015 2018 2012 2015 2018 Domestic U.S Transborder Atlantic Pacific & Other

Capacity is based on Available Seat Miles (ASMs), excluding charter. Total Revenues are based on Passenger and Cargo Revenue. *Air Canada adopted accounting standard IFRS 15 - Revenue from Contracts with Customers effective January 1, 2018. 2015 and 2012 amounts have not been restated for the adoption of this new accounting standard.

91 Our hubs are now global players Ranking by highest seat capacity in main hubs

Europe Asia

RANK RANK AIRLINE HUB RANK AIRLINE HUB 1 AC YYZ 1 UA SFO 1 AA MIA 2 UA EWR 2 AC YVR 2 DL ATL 3 DL JFK 3 AC YYZ 3 UA IAH 4 DL ATL 4 UA EWR 4 AA DFW 5 AA PHL 5 AA DFW 5 AC YYZ 6 AC YUL 6 AA LAX 6 UA EWR 7 UA IAD 7 DL DTW 7 AA JFK 8 AA DFW 8 DL SEA 8 AA LAX 9 UA ORD 9 UA ORD 9 UA ORD 10 DL DTW 10 DL ATL 10 UA IAD

Data based on peak summer 2019

92 Growth of traffic transiting Canada to/from U.S. Growing market share to 2% would represent approximately $675M of annual incremental revenue

AC Transit Passengers Carried to/from U.S. Market Share of International* Traffic to/from U.S.

+132% 44.6%

12.0%

10.4%

7.2% 6.2% 5.3%

3.1% 3.0% 3.0% 2.2% 1.3%

2013 2014 2015 2016 2017 2018 UA DL AA BA LH AF VS EK KE AC Other

US-PAC US-ATL *USA-PAC/ATL 2018

93 Fleet - focusing on narrow-body replacement 2021 – Narrow-body count increases by 13 aircraft vs. 2018 / Wide-body count at 100 aircraft

Type 2009 2014 2018 2019 2021 On Option Boeing 777 18 23 25 25 25 - Boeing 787 - 6 35 37 37 13 Airbus A330 8 8 8 12 13 - Boeing 767 30 21 6 - - - Boeing 767 - 8 25 25 25 - Total wide-bodies 56 66 99 99 100 13

A319/A320/A321 86 69 73 60 32 - Boeing 737 MAX - - 18 36 50 18 Airbus A220 - - - 1 30 30 Embraer E190 45 45 19 14 - - Airbus A319/A320/A321 - 20 28 38 39 - Total narrow-bodies 131 134 138 149 151 48

94 Sustainable growth Build our 3 Main Hubs The path to further success YYZ, YUL & YVR

International Growth with focus on counter

A320 FAMILY seasonality

Vancouver Montréal A220 Toronto Air Canada Rouge as a growing tool for regional

BOEING 737 MAX

Leverage Boeing 737 MAX and A220 in North America

95 Future opportunities for growth Toronto YYZ Strategically leveraging our three main hubs Further build our global power-house Serve Africa from our main hub

Montréal YUL Amplify our lead across the Atlantic Leverage a unique francophone market

Vancouver YVR Diversify a strong gateway to Asia Extend seasonal markets to year-round

96 Leveraging our successful A++ Joint Venture Opportunity to further increase highly profitable “Hub-to-Hub” flying

✓ Hub-to-Hub routes are consistently profitable • Network strength at both ends • Capacity & schedule coordination

Brussels • Cross-carrier selling ability Frankfurt Vancouver Vienna ZurichMunich • Product and pricing alignment Montréal Geneva Toronto • Integrated sales force • Increased value to top tier flyers

97 Boeing 737 MAX Offering superior range & economics over the A320 family Keflavik

Edmonton Winnipeg Shannon Vancouver London Montréal Frankfurt Ottawa St. John’s Nantes Toronto Halifax Bordeaux New York (LGA) San Francisco Los Angeles Palm Springs Orlando West Palm Beach Lihue San Jose del Cabo Honolulu Puerto Vallarta Cancun St. Maarten CASM Maui Pointe-à-Pitre Kona Ixtapa Fort-de-France St. Lucia -11% Aruba

Potential new routes A320 Boeing 737 Max Existing routes

98 A220-300 Unparalleled operating economics open the door to new possibilities

First of 45 aircraft to enter service in January 2020

CASM New Routes Under -12% Analysis Vancouver – Washington DC Montréal - Seattle Toronto - San Jose, CA Vancouver - Halifax

Potential* new routes Existing routes

E190 A220-300

99 A220-300 cont’d The CASM & capacity sweet spot

✓ A220-300 E190 A319 Competitive Advantages • Operate long and thinner A320 routes • Offer more frequencies than our competitors • Great CASM and lower trip

CASM A220 A321 cost than its predecessors

Boeing 737 MAX • Better low season capacity management • Offer a consistent premium product

90 110 130 150 170 190 Capacity

Data based on YYZ-SEA route Capacity based on seats

100 Counter-seasonal opportunities

Reducing network seasonality 2018 ASM Variance

+33% +30%

Vancouver Montréal Toronto

Honolulu

Q1 Q2 Q3 Q4 Quito ✓ Actions to counter seasonality • Launch winter seasonal routes • Extend seasonal routes to year-round São Paulo • Better shoulder capacity management

Auckland • Australia, India and Florida among top performing markets year round, especially in winter

101 Strategic efficiency of Rouge Upgauging from A319 to A320/A321 creates CASM reduction opportunity for Rouge narrow-bodies

Rouge narrow-body CASM 2018 2021 Narrow-Bodies Fleet Fleet -16%

A319 22 22 -8% A320 - 7

A321 6 10

Total Rouge narrow-bodies 28 39

Rouge narrow-body routes running at passenger load factors in high 80s

Opportunity for margin improvement by A319 A320 A321 upgauging A319 missions to A320 and A321 Seats: 136 Seats: 168 Seats: 200

CASM is based on variable expenses for average domestic route Rouge narrow-bodies Upgauging from A319 to A320/A321 creates CASM reduction opportunity for Rouge Narrow-bodies

A321 | 200 seats

Boeing 737-800 | 189 seats Boeing 737-800 | 189 seats ✓ Upgauging narrow-body capacity

• Superior CASM A320 | 168 seats • Economies of scale • Ability to compete from our hubs

Boeing 737-400 | 158 seats - Montreal – Victoria, BC - Calgary – London, ON - Toronto – Nanaimo, BC A319 | 136 seats

Source: DIIO Mi 2018

103 Enhancing our regional network New deal will enable Air Canada to further adapt to ever-changing environment

Regional 2018 2019 2020 2026 Aircraft CRJ900 21 26 35 TBD CRJ100/200 24 22 15 0 Bombardier 44 44 36 TBD Q400 Dash 8-300 25 23 19 TBD Dash 8-100 15 0 0 0 Total 129 115 105 TBD

Rouge A321 - - +5 TBD

Jazz & Air Georgian fleet reduced 2019 2020 2021 2022 2023 2024 2025 from 129 to 105 aircraft by 2020 $300M of undiscounted network More jets & fewer turboprops benefits from renegotiated Jazz deal to better operate long missions

104 Summary

✓ Focus on profitable growth ✓ Further leverage our A++ JV ✓ Diversified network ✓ Explore counter seasonal ✓ Boeing 737, Airbus A220 highlight opportunities narrow-body replacement program ✓ Fleet flexibility with enhanced CPA ✓ Strong position at our global hubs ✓ Optimize network

105 A Technological Transformation

Catherine Dyer Senior Vice President and Chief Information Officer Consistently at the forefront of innovation

Reservation Electronic 2D Barcode Mobile Flight Automation Ticket Technology Notification

1965 1999 2007

1963 1995 2006 2009

Black Express Electronic Box Check-in Barcode Pass

107 Digital technologies are redefining everything – including travel

ARTIFICIAL A P I S / MOBILE INTELLIGENCE MICROSERVICES

INTERNET CLOUD BLOCKCHAIN O F T H I N G S

108 We are investing in technology to become a global champion

Focus on Safe, Transform Transform our Secure and Reliable our technology IT organization operations to mitigate to enable improved to encourage business risks customer and innovation and support employee experience the required growth

109 Safety first, always, in a cyber world Safe, Secure and Reliable Operations

Identify Protect Detect Respond Recover

Ability Ability Ability Ability Ability to identify to protect the to detect to respond to rapidly weaknesses company’s and potential in a timely recover and potential its stakeholders’ attacks and and effective to a normal threats sensitive breaches manner operation systems and information

110 Preparing for the future by transforming Transform our our technology Technology

E N A B L I N G MISSION CRITICAL E M E R G I N G TECHNOLOGY SYSTEMS TECHNOLOGIES

▪ EIP ▪ PSS ▪ D a t a ▪ C l o u d ▪ L o y a l t y ▪ D i g i t a l ▪ N e t w o r k ▪ AI

111 Our technology improvements will be catalyst for improved airline operations and customer experience

INVENTORY RESERVATIONS DEPARTURE CONTROL MERCHANDISING MANAGEMENT

CUSTOMER EXPERIENCE PASSENGER RECOVERY/ GROUP MANAGEMENT LOYALTY MANAGEMENT DISRUPTION MANAGEMENT

112 Transforming our reservation system Transform our supports our business objectives Technology

Generate $100M+ in annual 1 incremental benefits

2 Improve operational efficiency

Improve customer experience 3 and enabling loyalty

113 Continuing to modernize technologies to support transforming our business

OPERATIONAL P E O P L E PROCUREMENT SUITE PLATFORM SYSTEM

114 Investing to innovate and lead Transform our in the industry Technology

Data, Digital, & Artificial Intelligence

115 Future opportunities for continued growth and optimization is substantial

E-Commerce, CRM, Cargo Customer Analytics SOC & Ops Excellence Revenue Planning & Optimization

Crew Planning Airports Maintenance & NA Scheduling

Network Global People & Customer Planning Sales & Culture Care Alliances

Value to Air Canada Air to Value Finance Product

Feasibility

11 Summary

✓ Taking back our spot as a ✓ Positioned to differentiate technology innovator – ourselves within the industry smart investment / through technology – digital focused execution first approach ✓ Setting the foundation for the next generation of the airline

117 Customer Digital and Loyalty

Mark Nasr Vice President, Loyalty and eCommerce 119 36,252 customers 9 out of 10 38 competitive Global perspective consulted Approximate proportion of programs The consumers we consulted members who knew their travelled in Canada and all over the That would fill over 90% of all the number off by heart We looked at travel, retail and world in the past year seats across Air Canada’s fleet credit card programs across every continent

147 hours of 11,610 total hours 1,000+ questions 1 feline escapee, interviews of surveys and suggestions almost We met customers in their Long enough to circle the globe Submitted to our microsite We thwarted his attempt to leave homes and in our offices, 273 times in a Boeing 787 at the interview just in time. Phew! individually and in groups cruising speed

120 The appeal is centred on the aspiration and relevance of travel

Consumers who Infrequent Road don’t travel travellers warriors 42% 54% 4%

121 Our program design delivers on what consumers want

Personalization Enable the Balance practical drives family dynamic with fanciful satisfaction Recognize customer Consider individuals in the Give customers the versatility preferences drive satisfaction context of their family-group to use their miles to improve their travel experience, Provide personal touches that Tailor the experience based or lower the cost of their trip, rival leading retail experiences on the trip purpose or save for a dream vacation

122 The opportunity

Annual Repeat Customers Increase credit 38% 28% 16% card penetration of elite members ~50% Market Share in Home Country

50% 47%

40%

Increase loyalty 35% 30% penetration of 22% 21% 20% airline flyers ~52% 16% 10% 5%

Represents leading U.S. carrier performance based on internal 0% benchmarking and public statements

123 Our goal is to win the hearts and minds of travellers – frequent and infrequent

“Earn our way into consumers’ lives everyday”

Build Trust and Make Rewards Recognize and Confidence Rewarding Differentiate

Intuitive ecosystem Best in market Active engagement, rooted in fairness and rewards, network attainable benefits common sense and global reach and recognition

124 “Capital L” Loyalty strategy

125 The kind of Loyalty that sticks around, through thick and thin

126 Our plan “Capital L ” LOYALTY

Aeroplan Acquisition & Digital Channel New Program Design Investments

Build the foundation for One-stop shop for loyalty success all things travel

Evolve Testing & Continuous Improvement Capabilities

Embed a test-and-learn culture in everything we do

127 Together, we are stronger than ever and bring unique capabilities to market

50.9M passengers/year Preferred airline of ~5M members worldwide 92% of travellers for business travel within Canada 1 of 4 Canadians travel with Air Canada 650K 12 month new members at least once per year ~10% 12M 2M Associated of all Canadian monthly mobile app payment credit card web visits downloads card annual spend is on an Members fly ~9x more spend Aeroplan card than the average Canadian Greater than GDP of 140 countries

Members spend $17B+ Equivalent to 2nd largest 51% have a household income on travel annually e-commerce site in Canada (est.) of $150K+

128 Our digital investments are paying off in incremental revenue and uptake

30% of customers ~16% YoY increase in >$1B in ancillary 53% upsell in branded opted into paid seat digital channel revenue generated fares beyond Basic selection via AC direct revenue via digital

Double the upsell rate Double our The highest of all on other non-AC 13% growth YoY 2016 results Air Canada channels online channels

129 Transforming the way we work – test and learn approach

Web release every Mobile release every 3 weeks DTL tests completed/ 3 weeks in-market 100+ test in-take

130 131 We continue to prototype, test and iterate with customers to understand what matters most, and why

132 “Capital L” results

✓ De-risks loyalty launch, supporting smooth customer transition ✓ Generates significant incremental value 7M for Air Canada members – Financial contributions starting 18 months early Targeting 40% growth over – Eliminates 3-4 year ramp period 3 years of launch – Incremental revenue, cost savings, and consortium contributions from American Express ✓ Enables significant growth in member base ✓ Additional value in ancillary revenue and distribution costs 2019 Earlier incremental revenue

133 Financial Targets and Risk Management – the Next Level

Michael Rousseau Deputy Chief Executive Officer and Chief Financial Officer Significant progress Opportunities ahead

✓ Sustainably profitable over New long term reservation system ✓ Delivered on commitments ✓ Much lower risk profile ✓ ROIC well in excess of WACC Loyalty

A220

135 Improved key financial targets

1. Targets factor in the expected impact of the new accounting standard change IFRS 16 2. Based on the consolidated results of Air Canada, including the Aeroplan loyalty business starting from the acquisition date of January 10, 2019.

136 Improved key financial targets

Over the period 2019-2021 ✓ Annual EBITDA margin 19% – 22% ✓ Annual return on invested capital 16% – 20% ✓ Cumulative free cash flow $4.0B – $4.5B ✓ Leverage ratio No more than 1.2 by end of 2019

Based on assumptions outlined in Air Canada’s February 28, 2019 news release

137 Project strong EBITDA margins Unique competitive advantages

138 Project strong EBITDA margins cont’d

✓ Investments in technology – new reservation system – Annual incremental benefits of $100M ✓ Cost Transformation Program – Savings of $250M by end of 2019 ✓ Replacement of less-efficient narrow-body aircraft ✓ Incremental benefits from extended capacity purchase agreement with Jazz ✓ Acquisition of Aeroplan loyalty business and launch of new program

139 Cost reduction remains a priority

Air Canada Rouge • Adjusted CASM is 29% lower than

Fleet • Boeing 777 and 787 cost-efficient fleet • Complete restructuring of regional fleet

Cost Transformation Program • Renegotiation of agreements

140 Building on cost productivity focus

On a cumulative six-year basis, Air Canada’s CASM performance was materially better than both WestJet’s and the U.S. Network Carriers

2018 Adjusted CASM (in cents) Adjusted CASM % Change (in local currency) 2012-2018

10.16 10.63 10.69 16.9% 8.9%

-9.8% -14.0%

WestJet (including profit share – comparable to Air Canada) Air Canada Adjusted CASM. Normalized for the impact of the USD/CAD exchange rate on operating expenses, Air Canada using 2012 as the base year U.S. network carrier average Air Canada Adjusted CASM WestJet Adjusted CASM (including profit share – • U.S. network carriers includes: Delta Airlines, United Airlines and American comparable to Air Canada) Airlines. CASM excludes fuel and special items/charges. Excludes third-party U.S. network carrier average business expenses at United Airlines.

141 Increased competitiveness in regional sector

Jazz CPA extended by 10 years (Jan. 1, 2026 to Dec. 31, 2035)

• Provides significant network benefits • Bolsters strength of Air Canada Express brand • Improves coast-to-coast regional network • Air Canada Rouge backfilling certain routes

142 Amended CPA with Jazz – Estimated NPV of $275M (2019-2025 period)

$50M $50M $53M Competitive rates 2019 2020 2021-2025 2026-2035

$97M equity investment — excellent value for shareholders

143 Loyalty

• Aeroplan loyalty business • Launch of new loyalty program in summer 2020

144 Loyalty cont’d Incremental benefits incorporated into three-year targets • NPV in excess of $2.5B • Materially contributes to free cash flow • Improves seasonality • Reduces risk profile from introduction of new program

145 Declining level of capital expenditures

Narrow-body fleet replacement program – Average mainline fleet age 8.5 years at end of 2021

$600M - $800M annually in non-aircraft expenditures focused on investments in technology

Level of projected capital expenditures to decline by $1.4B by end of 2021, when compared to 2019

By middle of next decade, certain Rouge aircraft will need to be replaced due to their age

IFRS 16 adds $200M to projected CAPEX due to higher capitalized maintenance (offset is reduced maintenance expense) (versus 2018 MD&A)

146 Capital allocation strategy

CUMULATIVE FREE CASH FLOW* OF $4.0B TO $4.5B OVER NEXT THREE YEARS

• Continue to aggressively manage debt levels • Purchasing majority of 2019 aircraft deliveries with excess cash • Share buyback program

* Excludes the net proceeds on the closing of the Aeroplan transaction

147 Leverage ratio of no more than 1.2 supports Investment Grade credit rating

SINCE 2012, AIR CANADA’S CREDIT RATING IMPROVED

S&P 4 notch improvement to BB with positive outlook Moody’s 5 notch improvement to Ba2 Stable

148 More aggressive buyback program an opportunity

PURCHASED, FOR CANCELLATION, 23.4M SHARES OR 8% OF OUTSTANDING SHARES (SINCE MAY 2015)

• Will continue to utilize Normal Course Issuer Bid • Expect to be more aggressive when opportunities present themselves

149 Much stronger balance sheet

✓ Lowered leverage ratio to 2.1 from 3.1 since end of 2012 ✓ Reduced average cost of debt to 4.4% ✓ Average cost of capital of 7.2%, 540 basis points lower than ROIC of 12.6% ✓ Freed up collateral by purchasing new aircraft ✓ US$2.6B unencumbered assets – will increase in 2019 ✓ Record unrestricted liquidity of $5.725B – will increase post-Aeroplan acquisition ✓ Excess cash of $2.0B

150 Financial risks are very well managed

PENSION FUEL FOREIGN EXCHANGE RISK MANAGEMENT RISK MANAGEMENT

• $2.4B* solvency surplus • Flexible program • U.S cash reserves • 81% of liabilities matched • Currently unhedged • Derivative contracts with fixed income products • Derivative contracts • 75% coverage for • No past service or current • Assessing IMO 2020 18 months service payments required market impact

*Based on preliminary estimates as of January 1, 2019

151 Much more resilient to economic downturns

✓ Higher margins ✓ Flexible and more efficient ✓ Lower cost structure fleet ✓ Record liquidity levels ✓ Ability to defer new aircraft future deliveries ✓ Lower leverage ratio Lease mix allows Air Canada ✓ Unencumbered asset pool ✓ to permanently reduce ✓ Diversified network – less capacity if required dependent on domestic

152 Much more resilient to economic downturns cont’d

By end Unencumbered aircraft Currently of 2021 • Air Canada and Air Canada Rouge 55 100 (23%) (40%)

Currently 55% of combined Mainline and Rouge is leased – Ratio will decrease as Air Canada purchases more aircraft with cash

153 Much more resilient to economic downturns cont’d

Cost-efficient fleet High-density aircraft

Boeing 787 Boeing 767

Boeing 737 MAX Airbus A321

Airbus A220 Airbus A319/A320

154 Much more resilient to economic downturns cont’d

Long-term labour agreements Summary

✓ Record results ✓ Adjusted CASM performance in line ✓ Improved key financial targets with U.S. network carriers ✓ New Jazz agreement – net present ✓ Lower leverage ratio supports value of $275M Investment Grade credit rating ✓ Loyalty program – net present ✓ A more aggressive share buyback value in excess of $2.5B program an opportunity ✓ Lower risk profile – record liquidity ✓ More resilient to economic levels, large unencumbered asset downturns than ever before pool and pension solvency surplus

156 Closing Remarks

Calin Rovinescu President and Chief Executive Officer

February 28, 2019 Report card

Operating Revenue $18.1B

EBITDAR Over $2.8B

Pension Solvency Position $2.4B* surplus

Leverage Ratio 2.1x

Liquidity $5.7B

8.4% reduction Adjusted CASM since 2013 *Based on preliminary estimates as of January 1, 2019 Report card cont’d

Yield Up 2.5% vs. 2017

PRASM Up 3.8% vs. 2017

Transit Traffic Up 142% vs. 2013

Air Canada Rouge Nearly 30M customers

Employees and unions Long term stability

Skytrax – Best Airline Customer engagement North America

Sustainability efforts Eco-Airline of the World Acceleration for 2019

Continue to leverage and mature new markets

Invest in new programs and efficient aircraft

Industry-leading in-house loyalty program

Cost reduction programs including improved CPA

New reservation system

Investment grade and share buybacks Questions?

aircanada.com

161 Thank you

aircanada.com

162 Appendix

163 Annual Assumptions 2019 - 2021

2019 2020 2021

GDP Canada Relatively Modest Growth

Canadian dollar per U.S. dollar 1.32 1.29 1.28

Jet fuel price – CAD cents per litre 82 84 85

164 Financial Information

• Air Canada’s consolidated financial statements are prepared in accordance with generally accepted accounting principles in Canada (“GAAP”), as set out in the CPA Canada Handbook – Accounting (“CPA Handbook”), which incorporates International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

• The 2018 comparative financial information contained in this presentation has been restated for the adoption of the new accounting standard IFRS 16 Leases which became effective January 1, 2019. Refer to Air Canada’s 2018 consolidated financial statements and 2018 MD&A for additional information.

• The forward looking financial information in this presentation is based upon the accounting policies and assumptions in effect as of January 1, 2019 and does not reflect the impact of any accounting standard changes that may be applicable to the Corporation’s financial statements in the future.

165 Non-GAAP Financial Measures

Air Canada uses certain non-GAAP financial measures that are derived from its consolidated financial statements, but that are not recognized financial measures for financial statement presentation under GAAP. Reconciliations of those measures to comparable GAAP measures for the relevant periods can be found in Air Canada’s Management’s Discussion and Analysis reports, which are available on Air Canada’s website at aircanada.com.

Adjusted Pre-Tax Income (Loss) • Air Canada uses adjusted pre-tax income (loss) to assess the overall pre-tax financial performance of its business without the effects of foreign exchange gains or losses, net financing income (expense) relating to employee benefits, gains or losses on financial instruments recorded at fair value, gains or losses on sale and leaseback of assets, gains or losses on debt settlements and modifications, gains or losses on disposal of assets, Aeroplan intangible asset amortization, and special items as these items may distort the analysis of certain business trends and render comparative analysis to other airlines less meaningful. Air Canada uses adjusted pre-tax income (loss) before interest expense to determine return on invested capital.

166 Non-GAAP Financial Measures

Adjusted Net Income (Loss) • Air Canada uses adjusted net income (loss) to assess the performance of its business without the after-tax effects of foreign exchange, net financing income (expense) relating to employee benefits, gains or losses on financial instruments recorded at fair value, gain or losses on sale and leaseback of assets, gains or losses on debt settlements and modifications, gains or losses on disposal of assets, Aeroplan intangible asset amortization, and special items as these items may distort the analysis of certain business trends and render comparative analysis to other airlines less meaningful.

EBITDA • EBITDA (earnings before interest, taxes, depreciation, amortization and impairment) is commonly used in the airline industry to view operating results before depreciation, amortization and impairment as these costs can vary significantly among airlines due to differences in the way airlines finance their aircraft and other assets. • EBITDA excludes special items as such items would distort the analysis of certain business trends and render comparative analysis to other airlines less meaningful.

167 Non-GAAP Financial Measures

Adjusted CASM (Adjusted Cost per Available Seat Mile) • Adjusted CASM is used by Air Canada as a means to assess the operating and cost performance of its ongoing airline business without the effects of fuel expense, the cost of ground packages at Air Canada Vacations®, the operating costs of Aeroplan, and special items, as such expenses may distort the analysis of certain business trends and render comparative analysis to other airlines less meaningful. Aircraft fuel expense is excluded from operating expense results as it fluctuates widely depending on many factors, including international market conditions, geopolitical events, jet fuel refining costs and Canada/U.S. currency exchange rates. Air Canada also incurs expenses related to ground packages at Air Canada Vacations which some airlines, without comparable tour operator businesses, may not incur. In addition, these costs do not generate ASMs and therefore excluding these costs from operating expense results provides for a more meaningful comparison across periods when such costs may vary. Air Canada began consolidating Aeroplan’s results on the January 10, 2019 acquisition date. Given that the Aeroplan loyalty business was not consolidated in Air Canada’s financial results in 2018, for comparative purposes, Air Canada’s adjusted CASM guidance for 2019 excludes any impact of Aeroplan.

168 Non-GAAP Financial Measures

ROIC (Adjusted Pre-tax Income Before Interest Divided by Invested Capital) • Air Canada uses return on invested capital (“ROIC”) as a means to assess the efficiency with which it allocates its capital to generate returns. • ROIC is based on adjusted pre-tax income (loss), excluding interest expense. • Invested capital includes average year-over-year long-term debt, average year-over-year lease obligations and average year-over-year shareholders’ equity, net of excess cash not required to run its core business operations. • Air Canada calculates invested capital based on a book value-based method of calculating ROIC, as described above. Refer to the definition of adjusted pre-tax income (loss) for a discussion as to why Air Canada uses adjusted pre-tax income (loss) to assess the overall pre-tax financial performance of its business.

169 Non-GAAP Financial Measures

Leverage Ratio (Net Debt to Trailing 12-month EBITDA) • Leverage ratio is commonly used in the airline industry and is used by Air Canada as a means to measure financial leverage. Leverage ratio is calculated by dividing net debt by trailing 12-month EBITDA (excluding special items).

Free Cash Flow • Free cash flow is commonly used in the airline industry and is used by Air Canada as an indicator of the financial strength and performance of its business, indicating the amount of cash Air Canada is able to generate from operations and after capital expenditures. Free cash flow is calculated as net cash flows from operating activities minus additions to property, equipment and intangible assets, and is net of proceeds from sale-leaseback transactions.

170 Estimated Expected Adjustments to the Statement of Financial Position as at January 1, 2018 under IFRS 16

December 31, 2017 Expected as previously Regional January 1, 2018 (Canadian dollars in millions) reported Air Canada aircraft aircraft Property leases as restated Accounts receivable $ 814 $ (3) $ - $ - $ 811

Deposits and other assets 465 (63) - - 402

Property and equipment 9,252 1,649 766 160 11,827

Deferred income taxes 456 71 144 13 684

Total assets $ 17,782 $ 1,654 $ 910 $ 173 $ 20,519

Accounts payable and accrued liabilities 1,961 (22) (12) - $ 1,927

Current portion of long-term debt and leases 671 357 146 12 1,186

Total current liabilities 5,101 335 134 12 5,582

Long-term debt and lease liabilities 5,448 1,452 1,092 198 8,190

Maintenance provisions 1,003 70 78 - 1,151

Other long-term liabilities 167 (8) - - 159

Total liabilities $ 14,360 $ 1,849 $ 1,304 $ 210 $ 17,723

Retained earnings 2,554 (195) (394) (37) 1,928

Shareholders' equity $ 3,422 $ (195) $ (394) $ (37) $ 2,796

Total liabilities and shareholders' equity $ 17,782 $ 1,654 $ 910 $ 173 $ 20,519

171 Estimated Expected Adjustments to the 2018 Consolidated Statement of Operations under IFRS 16

December 31, Expected 2018 as previously Regional December 31, 2018 (Canadian dollars in millions) reported Air Canada aircraft aircraft Property leases as restated Total revenues $ 18,065 $ - $ - $ - $ 18,065 Regional airlines expense 2,842 - (323) - 2,519 Aircraft maintenance 1,003 (100) - - 903 Depreciation, amortization and impairment 1,080 424 197 16 1,717 Aircraft rent 518 (512) - - 6 All other (including property rent) 11,448 - - (27) 11,421 Total operating expenses 16,891 (188) (126) (11) 16,566 Operating income 1,174 188 126 11 1,499

Interest expense (331) (131) (91) (14) (567) Foreign exchange and other (438) (157) (105) (1) (701) Total non-operating expense (769) (288) (196) (15) (1,268)

Income before income taxes 405 (100) (70) (4) 231 income tax expense (238) 27 19 1 (191) Net income $ 167 $ (73) $ (51) $ (3) $ 40

172 Key Financial and Non-GAAP Measures under IFRS 16

2018 restated 2018 as under (Canadian dollars in millions, except where indicated) under IFRS 16 previous IFRS Change

Revenue $ 18,065 $ 18,065 $ -

Operating expense, before depreciation and aircraft rent 14,843 15,214 (371)

Depreciation and aircraft rent 1,723 1,677 46

Operating expense 16,566 16,891 (325)

Operating income $ 1,499 $ 1,174 $ 325

EBITDA (EBITDAR) $ 3,222 $ 2,851 $ 371

EBITDA (EBITDAR) Margin % 17.8% 15.8% 2.0 pp

Adjusted pre-tax income $ 1,039 $ 952 $ 87

ROIC % 14.5% 12.6% 1.9 pp

Leverage ratio 1.6 2.1 (0.5)

Free cash flow $ 1,322 $ 791 $ 531

173 Contractual Obligations as at December 31, 2018 for IFRS 16 Lease Obligations

(Canadian dollars in millions) 2019 2020 2021 2022 2023 Thereafter Total

Additional Principal

Air Canada aircraft $ 403 $ 310 $ 230 $ 162 $ 162 $ 583 1,850 Regional CPA aircraft 180 183 172 167 169 312 1,183 Property leases 10 11 9 8 8 186 232 Total principal obligations 593 504 411 337 339 1,081 3,265 Additional Interest Air Canada aircraft 119 88 65 51 41 85 449 Regional CPA aircraft 84 70 56 44 30 26 310 Property leases 14 14 13 12 12 199 264 Total interest obligations $ 217 $ 172 $ 134 $ 107 $ 83 $ 310 $ 1,023 Total lease obligations $ 810 $ 676 $ 545 $ 444 $ 422 $ 1,391 $ 4,288 Revised total long-term debt and lease obligations

Principal $ 1,048 1,194 1,431 694 1,805 3,853 10,025 Interest 504 440 354 288 238 666 2,490 $ 1,552 $ 1,634 $ 1,785 $ 982 $ 2,043 $ 4,519 $ 12,515 Obligations related to leases not recorded as IFRS 16 lease obligations $ 28 $ 19 $ 13 $ 8 $ 7 $ 23 $ 98

174 Non-GAAP Measures under IFRS 16 - EBITDA

2018 restated 2018 as under (Canadian dollars in millions) under IFRS 16 previous IFRS $ Change

GAAP operating income $ 1,499 $ 1,174 $ 325

Add back (as reflected on the consolidated statement of operations):

Depreciation, amortization and impairment 1,717 1,080 637

Aircraft rent 6 518 (512)

Add back (included in Regional airlines expense):

Depreciation, amortization and impairment - 38 (38)

Aircraft rent - 41 (41)

EBITDA (EBITDAR) $ 3,222 $ 2,851 $ 371

175 Non-GAAP Measures under IFRS 16 - ROIC

2018 restated 2018 under (Canadian dollars in millions, except where indicated) under IFRS 16 previous IFRS $ Change Income before income taxes $ 231 $ 405 $ (174) Remove:

Foreign exchange loss 261 578 317 Net financing expense relating to employee benefits 50 50 - Loss on financial instruments recorded at fair value 1 1 - Gain on debt settlements and modifications (9) (9) - Loss on disposal of assets 188 188 - Adjusted pre-tax income $ 1,039 $ 952 $ 87 Interest expense 567 331 236 Implicit interest on operating leases - 274 (274) Adjusted pre-tax income before interest $ 1,606 $ 1,557 $ 49 Invested capital: Average long-term debt and finance lease obligations 9,649 6,386 3,263 Average shareholders’ equity, net of excess cash 1,375 2,065 (690) Capitalized operating leases - 3,913 (3,913) Invested capital $ 11,024 $ 12,364 $ (1,340) Return on invested capital (%) 14.5% 12.6% 1.9%

176 Non-GAAP Measures under IFRS 16 – Leverage Ratio

December 31, 2018 December 31, 2018 (Canadian dollars in millions, except where indicated) under IFRS 16 under previous IFRS $ Change

Total long-term debt and leases $ 8,873 $ 6,197 $ 2,676

Current portion of long-term debt and leases 1,048 455 593

Total long-term debt and leases, 9,921 6,652 3,269 including current portion

Less cash, cash equivalents and short-term investments (4,707) (4,707) -

Net debt $ 5,214 $ 1,945 $ 3,269

Capitalized operating leases - 3,913 (3,913)

Adjusted net debt $ 5,214 $ 5,858 $ (644)

EBITDA (EBITDAR) $ 3,222 $ 2,851 $ 371

Leverage ratio 1.6 2.1 (0.5)

177 Non-GAAP Measures under IFRS 16 – Free Cash Flow

2018 restated 2018 as under (Canadian dollars in millions) under IFRS 16 previous IFRS $ Change

Net cash flows from operating activities $ 3,465 $ 2,695 $ 770

Additions to property, equipment and intangible assets, net of proceeds (2,143) (1,904) (239) from sale-leaseback transactions

Free cash flow $ 1,322 $ 791 $ 531

178