IMPROVED FIRST QUARTER RESULTS STRATEGIC PLAN IMPLEMENTATION AND - PowerPoint PPT Presentation

IMPROVED FIRST QUARTER RESULTS STRATEGIC PLAN IMPLEMENTATION AND LAUNCH OF HOTEL DEVELOPMENT PLAN INVESTOR’S PRESENTATION MARCH 2018

Caution Regarding Forward-Looking Statements / Non-IFRS Financial Measures THIS PRESENTATION CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS WITH RESPECT TO THE CORPORATION. THESE FORWARD-LOOKING STATEMENTS, BY THEIR NATURE, NECESSARILY INVOLVE RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTEMPLATED BY THESE FORWARD-LOOKING STATEMENTS. WE CONSIDER THE ASSUMPTIONS ON WHICH THESE FORWARD-LOOKING STATEMENTS ARE BASED TO BE REASONABLE, BUT CAUTION THE READER THAT THESE ASSUMPTIONS REGARDING FUTURE EVENTS, MANY OF WHICH ARE BEYOND OUR CONTROL, MAY ULTIMATELY PROVE TO BE INCORRECT SINCE THEY ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT AFFECT US. THE CORPORATION DISCLAIMS ANY INTENTION OR OBLIGATION TO UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE, OTHER THAN AS REQUIRED BY LAW. THIS PRESENTATION ALSO INCLUDES REFERENCES TO NON-IFRS FINANCIAL MEASURES, SUCH AS ADJUSTED NET INCOME (LOSS), ADJUSTED EBITDA, ADJUSTED EBITDAR, FREE CASH FLOW AND ADJUSTED NET DEBT. PLEASE REFER TO THE APPENDIX AT THE END OF THIS PRESENTATION FOR ADDITIONAL INFORMATION ON NON-IFRS FINANCIAL MEASURES 2

Section 1: Introduction PAGE SECTION 1 Introduction 4 SECTION 2 Financial Performance and Outlook 9 SECTION 3 Financial Profile 16 SECTION 4 Transat Global Strategy 18 APPENDIX 24 3

One Of The Largest Tour Operators In North America ± $100M TRANSAT HIGHLIGHTS Adjusted EBITDA (1) 2.3M / 4.5M Customers Pax $3.0B Revenues 60+ ± 5,000 Destinations Employees (1) Reached 3 times in the last 5 years, Refer to Non-IFRS Financial Measures in the Appendix Producers Distributors TRANSAT VALUE CHAIN Service at Air provider Hotel provider destination provider 50% stake in Mexico Dominican Republic Jamaica Cuba (to come) « Work-in- Operated under the progress » on brands of:  Largest retail leisure travel distributors in Canada with 455 outlets New Hotelco Trafic Tours Turissimo  Comprehensive online distribution platform Become a leading integrated leisure travel provider to sun destinations and transatlantic 4

Distinct Summer and Winter Markets PAX DISTRIBUTION HISTORICAL ADJUSTED EBITDA (1) (2) Discontinued activities Continuing operations Total 15% (NOVEMBER TO APRIL) 5 (4) (In millions of C$) (18) WINTER (40) Transatlantic (40) (15) (32) Sun Destinations (36) (45) 2015 2016 2017 2018 85% Focus on Returning to Profitability in Winter (2) Discontinued activities Continuing operations Total 138 133 (MAY TO OCTOBER) 25% SUMMER (In millions of C$) 77 103 122 Transatlantic 53 Sun Destinations 30 24 16 75% 2015 2016 2017 2018 Protect Performance in Summer 5 (1) Adjusted EBITDA from continuing operations only and distribution activities included distributors, airline and destination management company. Refer to Non-IFRS Financial Measures in the Appendix (2) In 2015 and 2016, discontinued activities included Transat France, TourGreece, Jonview Canada and Ocean Hotels and in 2017, Jonview Canada and Ocean Hotels

2015-2017 Achievements  $105M Cost Reduction and Margin Improvement Program $105M Cost Reduction and Margin Improvement Program (C$ M) Achieved over 3-year Achieved 2016 target Achieved 2017 target Achieved 2015 target  Improved Product Offering $105 Introduced new European destinations  $75 Optimized sun destination offering  $45 Enhanced incoming tour operator presence in sun destinations   Transformed Distribution Strategy 2015 2016 2017 Developed Transat Travel brand  Improved new distribution website  Cost Reductions and Margin Improvements (C$ M) 2015 2016 2017  Fleet Renewal and Efficiency Cost Reductions Agreement signed on the replacement of A310 by A321neo LR gradually  Narrow-body flexible fleet 18 21 24 with its superior cost efficiency starting 2019 Reduction in the number of flight attendants 0 2 6 Agreement signed on the replacement of seasonal narrow-body aircraft  Buy-on-Board (sun destinations) 3 4 4 starting 2019 with Thomas Cook to achieve a full Airbus fleet with same Optimization of hotel costs (sun destinations) 2 13 19 cockpit Optimization of distribution costs 11 13 13  Other 4 2 3 Succession Plan Sub-total (Costs) 38 55 69 Appointment of Annick Guerard as Chief Operating Officer  New management team who’s taking over the controls  Margin Improvement  Ancillary revenues and cargo (more details in appendix) 5 15 30 Market Refocusing and Development Densification of three A330-300s 2 5 5 Unlock significant value of unrecognized assets (~$330M)  Other 0 0 1 Sold our activities in France and Greece (~$90M)  Sub-total (Margin) 7 20 36 Sold our 35% interest in Ocean (~$190M)  Total 45 75 105 Sold our incoming tour operator in Canada, Jonview (~$50M)  Reinvestment of disposal proceeds by FY22 towards the development of  our own hotel chain with the objective of doubling the returns 6

2018-2022 Strategic Plan 2018 TRANSAT OBJECTIVES  Transat focused on sustainable profitability 1 Launch a wholly-owned Transat hotel chain; Set up the team, develop the concept through the improvement and strengthening of its and select the brand and initiate the first acquisitions of hotels and/or land current business model and by developing its hotel chain Improve efficiency, in particular by improving revenue management, pricing and 2  aircraft utilization and by pursuing its cost reduction program Hotel business unit will operate all-inclusive hotels in the Caribbean and Mexico (wholly owned and managed) Improve distribution by continuing to grow direct sales, refining channel 3 management and strengthening our presence in mobile technologies Strengthen Transat Winter profitability  Deliver a controlled end-to-end experience to its Canadian  customers Enhance customer proximity, particularly through centralized customer 4 relationship management and satisfaction metrics  Current business model focused on satisfying the expectations of leisure customers with friendly Strengthen our commitment to corporate responsibility, particularly by obtaining 5 service at affordable prices Travelife certification and refining our employee satisfaction metrics Increase efficiency and reduce costs  Improve Corporation’s digital footprint  Focus on developing the revenue management and air  network planning further TO CREATE LONG TERM SHAREHOLDER VALUE 7

Section 2: Financial Performance and Outlook PAGE SECTION 1 Introduction 4 SECTION 2 Financial Performance and Outlook 9 SECTION 3 Financial Profile 16 SECTION 4 Transat Global Strategy 18 APPENDIX 24 8

Sun Destinations Capacity Breakdown │ Winter 2017-18 (1) (Based on scheduled and chartered flight deployed) 1.50 Winter 2017 (Final) TOTAL SEATS IN 5 -1% Winter 2018 (Forecast) THE MARKET 24 1.25 23 +8% WINTER 2017 +10% % 1.00 4,180,000 +1% millions of seats 20 0.75 28 TOTAL SEATS IN THE MARKET 0.50 Transat Sunwing-Signature +17% WINTER 2018 WestJet Vacations Air Canada Vacations 0.25 4,355,000 Other +4% 0.00 Other 9 (1) Capacity between Canada and the following sun destinations as : Mexico, Dominican Republic, Cuba, Caribbean, Jamaica and Central America

First Quarter Financial Performance HIGHLIGHTS (vs. 2017) 1 st quarter results ended January 31  Adjusted EBITDA (1) improved by $6M or (in thousands of C$) 2018 vs. 2017 2018 2017 $9M on a like-for-like basis (excluding business $ % sold in 2017 such as Ocean Hotels and Jonview Canada) REVENUES 725,782 689,332 36,450 5.3%  Sun Destination industry capacity up by 6% Adjusted EBITDAR (1) (857) (976) 119 12.2%  Sun Destination Market (453k seats) Adjusted EBITDA (1) (31,026) (37,079) 6,053 16.3%  Capacity increased by 10.0%  Travelers up by 6.2% As % of revenues (4.3%) (5.4%) 1.1% 20.5%  Average prices were slightly higher  Transatlantic Market (100k seats) Adjusted net income (loss) (1) (33,868) (36,039) 2,171 6.0%  Capacity increased by 21.4% As % of revenues (4.7%) (5.2%) 0.6% 10.7%  Travelers up by 20.8%  Average prices were higher Per share ($0.91) ($0.98) $0.07 6.8%  Costs Net income (loss) attributable to shareholders (6,588) (32,073) 25,485 79.5% Appreciation of C$ against US$ combined to an  increase in fuel prices leads to a decrease of our (1) Refer to Non-IFRS Financial Measures in the Appendix operational costs by ($13M) Negative impact in maintenance costs related to  10 one-time events of +$9M