Ms. Andrean Gagne reports

TRANSAT CONCLUDES A FINANCING AGREEMENT UNDER THE LIQUIDITY FOR AIRLINE SECTOR RESILIENCE FACILITY

Transat A.T. Inc. has entered into a financing agreement under the liquidity for airline sector resilience facility recently established by the federal government, in line with the intention it expressed when releasing its second quarter results on June 11, 2026. This agreement provides Transat with financial support of up to $150-million to help mitigate the impact of the unprecedented increase in aviation fuel prices affecting the entire industry.

The amount of the credit facility will be determined based on the amount required to offset the impact of higher aviation fuel costs through Oct. 31, 2026, compared with the same period in 2025. The loan will be drawn in monthly tranches, with an initial amount of $125-million disbursed today. The loan has a four-year maturity and will bear interest at an annual rate of 3.91 per cent.

Details of the LASR program are available on the Canada Enterprise Emergency Funding Corp. website.

Given that CEEFC holds share purchase warrants and convertible preferred shares exercisable or convertible for an aggregate of 13,893,390 Class B voting shares of the corporation, representing approximately 25.3 per cent of the corporation's outstanding voting shares after giving effect to such exercise or conversion, provided that at no time will the exercise of warrants or conversion of preferred shares result in CEEFC beneficially owning or controlling in excess of 19.9 per cent of the corporation's voting shares, CEEFC may be considered a related party for the purposes of Regulation 61-101 respecting protection of minority securityholders in special transactions. The financing agreement can therefore constitute a related-party transaction as that term is defined in Section 1.1 of Regulation 61-101. Pursuant to Section 5.4(1) of Regulation 61-101, Transat is not required to obtain a formal valuation for the financing agreement. Furthermore, pursuant to Section 5.7(1)(f) of Regulation 61-101, Transat is exempted from seeking minority approval as the financing agreement is on reasonable commercial terms that are not less advantageous to Transat than if the financing agreement were obtained from a person dealing at arm's length with Transat, and the financing agreement is not convertible or repayable (as to principal or interest) in equity or voting securities of Transat (and the financing arrangement does not impact the number of securities of the corporation beneficially owned, or controlled, by CEEFC and its affiliates). Following the unanimous recommendation by a special committee composed exclusively of independent directors, the financing arrangement has been unanimously approved by the corporation's board of directors, and all of Transat's directors are at arm's length from CEEFC.

The corporation did not file a material change report more than 21 days before issuance of the financing arrangement because the details of the financing arrangement were not settled until recently.

About Transat A.T. Inc.

Founded in Montreal in 1987, Transat has achieved worldwide recognition as a provider of leisure travel particularly as an airline under the Air Transat brand. Voted world's best leisure airline by passengers at the 2025 Skytrax world airline awards, it flies to international destinations. Air Transat's fleet includes some of the most energy-efficient aircraft in its category. Based in Montreal, Transat has over 5,000 employees with a common purpose to bring people closer together.

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