QUOTE;
Procedure for Exchange of Voting Shares Certificates by Registered Shareholders;
Letter of Transmittal and Election Form Enclosed with this Circular is the form of Letter of Transmittal and Election Form which, when properly completed and duly executed and returned together with the certificate(s) representing Voting Shares and all other required documents, will enable each Shareholder (other than Dissenting Shareholders) to obtain the Consideration that such Shareholder is entitled to receive under the Arrangement. A Letter of Transmittal and Election Form has been mailed, together with this Circular, to each Registered Shareholder on the Record Date.

Each Shareholder (other than a Dissenting Shareholder) may elect to receive in respect of each Voting Share, the Cash Consideration or the Share Consideration. Such election shall be made by depositing with the Depositary, prior to the Election Deadline, a duly completed Letter of Transmittal and Election Form indicating such Shareholder's election, together with, as applicable, any certificates representing such Shareholder's Voting Shares and any other documents as described in the Letter of Transmittal and Election Form. The completed Letters of Transmittal and Election Forms must be received by the Depositary prior to the Election Deadline, unless otherwise agreed in writing by the Purchaser and the Corporation. Transat will include notice of the Election Deadline in a press release disseminated over newswire service in Canada at the latest on the Business Day immediately before the Election Deadline. Investors who purchase Voting Shares shortly before the Closing Date are hereby advised that they may not have sufficient time in order to submit a duly completed Letter of Transmittal and Election Form by the Election Deadline in respect of such Voting Shares and should consult with their broker, trust company or other Intermediary and seek advice from their professional advisers in advance of any such trades.

Any Shareholder who does not deposit with the Depositary a duly completed Letter of Transmittal and Election Form within the deadline set forth above, or otherwise fails to comply with the requirements of the Letter of Transmittal and Election Form, shall be deemed to have elected to receive for each Voting Share, the Cash Consideration.

Shareholders whose Voting Shares are registered in the name of an Intermediary should contact that Intermediary for instructions and assistance in delivering Voting Share certificate(s) representing those Voting Shares.

The form of Letter of Transmittal and Election Form contains complete instructions on how to exchange the certificate(s) representing your Voting Shares for the Consideration under the Arrangement. You will not receive your Consideration under the Arrangement until after the Arrangement is completed and you have returned your properly completed documents, including the Letter of Transmittal and Election Form the certificate(s) representing your Voting Shares to the Depositary. Any Letter of Transmittal and Election Form, once deposited with the Depositary, will be irrevocable and may not be withdrawn by a Shareholder, except that all Letters of Transmittal and Election Form will be automatically revoked if the Depositary is notified in writing by Transat and Air Canada that the Arrangement Agreement has been terminated. If a Letter of Transmittal and Election Form is automatically revoked, the certificate(s) for the Voting Shares received with the Letter of Transmittal and Election Form will be promptly returned to the Shareholder submitting same to the address specified in the Letter of Transmittal and Election Form.

 Only Registered Shareholders are required to submit a Letter of Transmittal and Election Form. If you are a Non-Registered Shareholder holding your Voting Shares through an Intermediary, you should contact that Intermediary for instructions and assistance and carefully follow any instructions provided to you by such Intermediary.

From and after the Effective Time, all certificates that represented Voting Shares immediately prior to the Effective Time will cease to represent any rights with respect to Voting Shares and will only represent the right to receive the Consideration or, in the case of Dissenting Shareholders, the right to receive fair value for their Voting Shares.