An anonymous director reports

AIR CANADA COMPLETES $800 MILLION SUBSTANTIAL ISSUER BID

Air Canada has taken up and paid for 27,586,206 of its Class A variable voting shares and Class B voting shares at a price of $29 per share under its $800-million substantial issuer bid to purchase shares for cancellation.

The shares bought under the offer represent about 9.8 per cent of the total number of Air Canada's outstanding shares as of Sept. 24, 2026, before giving effect to the offer. After the offer, about 252.7 million shares will remain outstanding.

The completion of this offer is an important milestone in Air Canada's disciplined execution of its capital allocation framework and priorities, allowing it to complete the return of its share count to below prepandemic levels. The share purchase was financed with part of the proceeds from the minority equity investment in Aeroplan by funds managed by Blackstone and La Caisse, together with other leading Canadian institutions. Completion of the offer allows Air Canada to return value to shareholders while continuing to invest in its new frontiers strategy and support one of the strongest balance sheets among its North American peers.

Other information about the offer

A total of about 66.8 million shares were validly deposited in the offer and not withdrawn pursuant to auction tenders at $29 or purchase price tenders. Since the offer was oversubscribed, about 41 per cent of the tendered shares were purchased by Air Canada, other than odd lot tenders not subject to proration.

Air Canada has paid TSX Trust Company (Canada), the depositary under the offer, about $800-million for the purchased shares. Settlement will be made by the depositary on or before Oct. 2, 2026, in accordance with the offer and applicable law. Any shares that are not purchased, including as a result of proration or auction tenders at more than $29, will be returned to shareholders as soon as practicable.

Air Canada estimates that, for purposes of the Income Tax Act (Canada), the paid-up capital per share is about $10.60. Shareholders who have sold shares to Air Canada under the offer will as a result be deemed to have received a dividend equal to $18.40 per share, the amount by which the purchase price exceeds the paid-up capital per share for Canadian federal income tax purposes. The dividend deemed to have been paid by Air Canada to Canadian resident persons is designated as an eligible dividend for purposes of the ITA and any corresponding provincial and territorial tax legislation. The specified amount for purposes of Subsection 191(4) of the ITA is $18.40. Shareholders should consult with their own tax advisers with respect to the income tax consequences of the disposition of their shares under the offer.

The full details of the offer were described in the offer to purchase and issuer bid circular dated Aug. 20, 2026, as well as the related letter of transmittal and notice of guaranteed delivery, copies of which were filed and are available under Air Canada's profile on SEDAR+.

About Air Canada

Air Canada is Canada's largest airline, the country's flag carrier and a founding member of Star Alliance, the world's most comprehensive air transportation network. Headquartered in Montreal, Air Canada provides scheduled service directly to more than 180 airports in Canada, the United States and internationally on six continents. It holds a four-star ranking from Skytrax. Air Canada's Aeroplan program is Canada's premier travel loyalty program, with more than 10 million members worldwide. Members can earn or redeem points on the world's largest airline partner network of more than 50 airlines, plus through an extensive range of merchandise, hotel and car rental partners. Through Air Canada Vacations, it offers a selection of vacation and flight and hotel packages, tours, cruises, car rentals, and experiences. Its freight division, Air Canada Cargo, provides air freight lift and connectivity to hundreds of destinations across six continents using Air Canada's passenger and freighter aircraft. Air Canada's climate-related ambition includes a long-term aspirational goal of net-zero greenhouse gas emissions by 2050. Air Canada shares are publicly traded on the Toronto Stock Exchange.

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