Mr. John Di Bert reports

AIR CANADA ANNOUNCES PREPAYMENT OF AIRCRAFT RELATED DEBT TOTALLING APPROXIMATELY $589 MILLION

Air Canada has prepaid loans of approximately $462-million from Export Development Corp. (EDC) previously used by the company to help finance its acquisition of 14 Airbus A220-300 aircraft. The prepayment, which is also subject to accrued interest and break costs, was made on Aug. 30, 2023. The airline additionally prepaid financings of approximately $127-million supported by the Export-Import Bank of the United States (ExIm) previously used by the company to help finance its acquisition of four Boeing 787-8 aircraft. The prepayment, which is also subject to accrued interest, was made on Sept. 6, 2023.

"One of Air Canada's top priorities following the pandemic is to deleverage and since late last year we have now prepaid approximately $1.87-billion in debt. This strengthens our balance sheet and provides us more flexibility to make strategic investments, including to improve the customer experience, and to continue upgrading our fleet such as through our previously announced acquisition of Canadian-made Airbus A220 aircraft. With our very solid liquidity position and cash flow we will continue to look for more opportunities to reduce debt further. We were pleased to partner with EDC in supporting the Canadian aerospace industry and we thank Exlm for facilitating our acquisition of Boeing aircraft," said John Di Bert, executive vice-president and chief financial officer of Air Canada.

The prepayment for the financed aircraft was achieved via:

• A full prepayment of the remaining loans under Air Canada's 2020 credit facility with EDC for the acquisition of Airbus A220-300 aircraft;
• A partial prepayment of Air Canada's financing arrangements supported by ExIm for the acquisition of four Boeing 787-8 aircraft.

As a result of the prepayments, these aircraft will be added to Air Canada's unencumbered asset pool, bringing the total to approximately $6.3-billion, excluding Aeroplan.

The amount of debt prepayments now totals approximately $1.87-billion since and including the repurchase of some of its outstanding 4.000 per cent convertible senior notes due 2025 completed last year, leading to an aggregate reduction in interest expense of approximately $158-million (approximately $114-million in cash) on an annualized basis.

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. 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, where members can earn or redeem points on the world's largest airline partner network of 45 airlines, plus through an extensive range of merchandise, hotel and car rental rewards. 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 has committed to a net-zero emissions goal from all global operations by 2050.

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