TRANSFORMING INTO A GLOBAL CHAMPION

- 90% OF PROJECTED CAPACITY GROWTH AIMED AT INTERNATIONAL MARKETS Focused on selective expansion of network and developing synergies offered by alliances with other carriers Historically, margins have been the highest on international routes Leveraging strengths internationally: - extensive and expanding global network geographically well-positioned hubs competitive products and services Capacity growth of 13.9% in the first nine months or 2016, of which 87.7% was to international destinations Launched more than 20 international and U.S. Transborder routes in the summer of 2016 - most intensive period of expansion in Air Canada's history - all fully meeting expectations Natural consequence - anticipated negative yield impact due to increased average stage lengths and a greater mix of leisure revenues vs business revenues However, incremental traffic is being flown at a significantly lower-cost (B787s, increased seats on B777s, and Air Canada Rouge) resulting in margin expansion Diversified network lowers risk profile 9

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