TRANSFORMING INTO A GLOBAL CHAMPION

COMMITTED TO STRENGTHENING BALANCE SHEET USING FREE CASH FLOW ☐ $8B in capital expenditures to acquire more efficient aircraft and improve the competitiveness of existing aircraft to better position Air Canada for the future Access to EETC market at investment grade rates Cash inflow of $690M in 2016 from sale of 20 E190s and sale and leaseback of two B787s Lowering adjusted net debt and leverage levels is top priority followed by shareholder distributions via share buybacks Leverage ratio and credit ratings have improved Completed $1.25B refinancing transaction at a lower cost of debt and extended term Increase in unencumbered asset pool by $650M to approximately $2B Income tax shelter of $4.7B* - Operating loss carryforwards of $400M and tax shields related to fixed assets and pension obligations of $4.3B *As of December 31, 2015 LANCE SHEET and equament ent assets Note 26

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