#1AIR CANADA Air Canada's Annual Meeting of Shareholders Calin Rovinescu President and Chief Executive Officer, Air Canada Montréal, May 5, 2017 A STAR ALLIANCE MEMBER MEMBRE DU RÉSEAU STAR ALLIANCE#2DC-8 CF TJX 864 10 Celebrating 80 years HSBC 273#3CF September 1 1937 TCA First flight from Vancouver to Seattle CF-TC#41938 CF-BAF First airline to install alcohol de-icing nozzles#51943 WS CANADA First trans-Atlantic flight, Montreal to Prestwick AIR LINES CI#6TCA's 3 millionth passenger July 1950 TCA'S 3.000.000. PASSENGER TR TCA CBC AF RO#7Installation of anti-skid brakes 1950s 12.9 LE TCA TRANS-CANADA AIR LI AIR CANADA#81960s TRANS-CANADA AIR LINES Introduction of jet aircraft AIR CANADA 1963 1965 Computerized reservation system Covered walkways#9TCA TRANS-CANADA AIR LINES TCA AIR CANADA 1965#10Jumbo jet era - Air Canada takes delivery of its first Boeing 747 AIR CANADA 747 1970s#11EXIT First female pilot, SORTIE Captain Judy Cameron 1977 2015#12Air Canad Air Canada RIC DOMINION SECURES 301-009063 $493.513,500 1988 Privatization of Air Canada Air Canada#13First carrier to make its European flights non-smoking 1990s Debut of self-service kiosks EGISTREMENT ress CHECK AIR CANAD ENREGISTREMENT Express CHECK-IN Libre-service Self-service Aeroplan cand credit card carte Airplan arte de credit#14Merger with Canadian Airlines Canadion C-GCPX Hostile takeover bid 2000s ONEX SARS 9-11#15AIR CANADA 55555555555 5500 2000s C-FITU 732#16The Turnaround#17Desire to win#18Record Operating Revenues 50% $14.7 Billion $9.7 Billion INCREASE 2016 2009#19Record EBITDAR 300% $2.8 $679 Billion Million 2016 2009 INCREASE RECORD 18.9% MARGIN#20Return on Invested Capital 14.7% -1.5% 2016 2009#21Leverage Ratio 2.6X 8.3X 2016 2009 NOW SUSTAINABLE#22Unrestricted Liquidity 140% $3.4 Billion $1.4 Billion IMPROVEMENT 2016 2009#23Domestic Registered Pension Plans REVERSAL OF $1.9 -$2.7 Billion Billion $4.6 Billion surplus deficit 2016 2009#24Record Number of Passengers 45 31 Million Million 2016 2009 45% INCREASE#25Average Passenger Load Factor 82.5% 2016#26Return on investment over 1,600% 2025 1321 336 25 RS 2435-4625 635 3825 6.35% 89633 354 322 0 217 8368 +8025 1321 120% 896.33 638 763 4445 46.23 825 635% 375.69 956 14445 255 635 -95.36 282.80 217 8368 +80.25 1321 217 8868 48025 1321 120% 896.33 7.63 44.45 -2.55 6.35 8.35% 282.80 217 83 763 4445 255 825 635% 25636 278 56.39 +74.36 245.3 606848025 1821 335% 37569 956 2435 -45.23 825 6.35% 282.80 7569 955 2485 45.2 6.35 8.35% 248.36 458 65.36 -95.36 61.4 4.25% 375.6 8250 88883 354 3223 +5.33 3.35 5.36% 375.69 9.56 24.35 -45.23 763 4445 5.23 825 6.35% 375.69 9.56 2435 -45.23 82.5 6.35% 896.33 7.63 255 8.35 9536 28280 217 8368 +80.25 1321 1.20% 896.33 7.63 4445 45 25 825 636 29636 278 56.39 +74.36 245.3 9.33% 896.33 7.63 44.4 8025 1321 3853 STEP 3435 -45.23 82.5 6.35% 282.80 2.17 83.68 +80.2 65.36 95.36 61.4 4.25% 375.69 9.56 536% 375.69 9.56 24.35 -45.23 5 255 6.35 8.35% 282.80 2.17 4.35 1321 6.35% 89#27Q1 Results for 2017 System traffic Revenues Adjusted CASM Fuel costs Unrestricted liquidity $4.073 billion 14% 8.9% 6% 48% Free Cash Flow $470 EBITDAR results Exceeded analysts' consensus estimates million#28We get to play multi-dimensional chess, in full view of the public TH Rapid City Valley CITY Sioux Fa Norfolk Omaha MINN7 Cloud will Minneap Manka Alber Ca D A BU BALTIMO Char 31#29We convey everything good about Canada C-GJWI 1126-200 458#30Lessons Learned#31Global Champion#32amazon.com Google SAMSUNG#33Our four guiding corporate priorities since 2009 SSS ☑ Revenue growth and cost transformation International expansion Culture change OC Customer engagement осиб#34Invest in Risk#35Invest in Risk Grew capacity outside Canada by 74% 90% of growth in 2016 was on international markets Reykjavik CHICONE HAND- ASIA 451 смисао Beijing Hang Dong HOOF MACHY DENARASAR BUSAN Nagoya Osekoo FURIJORA Shanghal ORNANA o Talpel AUSTRALIA AUSTRALIE SAFFORD Brisbane o- Sydney O- NELBOURNE ANDACE WHEERDESE Catu/Honolulu O Maui/Kahului Kailua-Kona/Keahole MADON VANCOUVER ° CALGARY BICINAL www YCTURA THINGS BAY LAS VEGAS LOS ANGELE Ottawa MONTREAL TORONTO-O BOSTON Halifax CHICAGO ENVE المية Mexico City Jonny Uberia San Jose Parama City CEORGETOWN CMENNE Bogute C Lime ARCA SOUN AFAFRICA AMERIQUE DE BOD RECIFI •SANADOE ASUA DE JANERO INTOMCAST São Paulo ASUMCON FORTO ALEGE www PLERO MONTT Santiago STADS +RO GRANDE ■MONTEVIDEO Buenos Aires NUOLIN MERMA +HAPA BLANCA BO GALLEGOS KUNTA APENAS STANCER Edinburgh Glasgow imito Dabinet Waltender m Lendon Manchester is of Berlin Frankfurte Care Brussel sofelles Lens Pars Lisbon Nacrid Geneva Wanaw Prague V O Mainich Zuch Budapest BUCHES TOLOUSE Milan Vence Marsele Nice Barcelona Laborne NCIA FAINA WEDNE Algers MALIGN Casablanca Rome Athens Alhères MADERA TENERIFE LAS HUMUS CONARY AMICA MTIONE PORT HET O OUNDE CARD DEBUT DOLA DICAL UMBUKA NASA EUROME MEREVAN AVON ww BACU TCTV Delhi MANGAL CHENNA ASHARA ADDIS ABA прони NDOLA LONGWE HIMBA USAKA+ BLANTYRL UNGSION. HMAR VETURALLY GARCANE HAFUTU KANZ BONIONINDUS +MTHATHA EAST LONDON CAPE TOWN PORT BLANETH#36Invest in Risk Invested in fleet: $10 billion CapEx program Aircraft Boeing 787 Dreamliner Boeing 737 Max Planned To Come 37 AIR CANADA AIR CANADA Bombardier C-Series (order for 45) 61 12 First to be delivered in 2017#37Invest in Risk Launched leisure airline: Air Canada Rouge - Maintain or expand leisure routes Enter new international markets Flexibility Best New Long-Haul Airline 49 aircraft, 93 routes, touching five continents AIR CANADA rouge...#38Invest in Risk De-risked Air Canada Beneficial effects: • Route diversification • Increased fleet flexibility • Fully-funded pension plans Long-term labour contracts (10-year agreements) Lowered balance sheet with $1.25 billion refinancing • Reduced debt by $355 million Expected to generate $60 million in annualized interest savings#39Invest in Risk 2016 Investor targets: - Achieve annual EBITDAR margin of 15% to 18% (18.9% in 2016) Achieve ROIC of 9% to 12% (14.7% in 2016) Target leverage ratio of 2.2 by 2018 (2.6 at year end) - Reduce overall unit cost structure, making progress each quarter to reduce CASM by 21% 90% YEAR 1 100 75% YEAR 2 50% YEAR 3 80 YEAR 4 60 100 YEAR 5 YEAR 6 40 75 EARN 20 100 75 50 25 35% 50% 25 70% 100% +5% 416 growth 75%#40Invest in Brainpower#41Invest in Brainpower Air Canada creating jobs and opportunities: - - Hired 1,500 in 2016 (800 more expected for 2017) Since 2009, company has grown from about 26,000 to more than 30,000 Marky Chuck#42Invest in Brainpower Support companies that also invest in brainpower - - Create leading-edge technologies and capabilities Challenge the status quo First major North American airline to order Bombardier C Series Encourage disruption BOMBARDIER AIR CANADA Rob Dewar Fred Cromer an C Series#43Invest in Brainpower Recruitment website gets 110,000 visits each month 290 applicants for every job filled Culture change Montréal's Top Employers Canada's Top 100 Employers 2016 SOTE Ⓡ 2016#44Invest in Diversity#45Invest in Diversity - - 60 different languages spoken 20% belong to visible minorities 2016 CANADA'S BEST DIVERSITY EMPLOYERS DIAEBCILA EWDIOXEB СУЙУDV2 ВЕГІ SOJE#46AIR CELAD 000#47←→ Invest in Diversity Promoting women throughout the company#48Invest in Diversity Air Canada is amongst the most bilingual private sector companies in Canada Almost 50% of contact employees are bilingual Materially in excess of national statistics throughout the country 94% of customers were satisfied or extremely satisfied overall with service received in their preferred official language (Ipsos Reid 2016) AIR CANADA English Français STAR ALLIANCE#49Leave the Room Better#50Leave the Room Better The Air Canada Foundation Committed to children's causes through: • • Dreams Take Flight Syrian Refugee Mission Children's Miracle Network BI • Breakfast Club of Canada • Starlight Children's Foundation AIR CANADA foundation DREAMS TAKE FLIGHT VOYAGE DE RÊVE H#51Leave the Room Better The Air Canada Foundation turns 5 this year - Raised 7% more funds than in 2015 Increased grants to Canadian charitable organizations by about 40% 6.5 million miles donated to pediatric hospitals in 2016 AIR CANADA foundation LIMONADE LEMONADE Children's Miracle Network CHAG Co EVER COL#52Leave the Room Better Sustainability efforts measure our progress - 40% reduction in our carbon footprint Listed amongst top 100 companies in the world for CSR reputation#53Leave the Room Better - Performance recognized on Jantzi Social Index AIR CANADA LEAR Copovale zecability Report 2013 Citizens of the world ASTAR ALUNCE U#54Share Success Stories#55Share Success Stories - Private enterprise employs more than 75% of all working people Largest companies take much risk deploying billions in capital Employ millions of Canadians Account for most of the value of Canadians' investment portfolios Contribute the largest share of corporate taxes Responsible for: ⚫ most Canadian exports • most private-sector investments made in research and development most investments made in corporate philanthropy#56Share Success Stories Air Canada: - Saved 26,000 jobs 1 Created 4,000 jobs Saved pensions Increased salaries Paid profit-sharing bonuses Built a powerful new leisure carrier Grew international capacity connecting to 6 continents#57Conclusion#58CF TCA CF-TC 8 decades#59As a Global Champion we will: Change - Improve - Innovate Grow stronger Stay ahead of the pack DREAMLINER AIR CANADA#60Thank you David Richardson#61801#62Thank You - To our 30,000 dedicated employees for their hard work and taking care of our customers and producing record results To our shareholders for their ongoing support To our customers for their continued loyalty 62#63AIR CANADA Air Canada Annual Meeting of Shareholders Montréal, May 5, 2017 A STAR ALLIANCE MEMBER MEMBRE DU RÉSEAU STAR ALLIANCE