Transat A.T. Inc. amends its capital structure following shareholder approval of the Creation of Two Classes of Common Shares

Montreal, Qc, Canada, February 24, 2005


Move allows the Company to ensure compliance with foreign ownership rules while maintaining its liquidity
Transat A.T. Inc filed its Articles of Amendment today with the federal authorities, as required under the Canada Business Corporations Act. In so doing, Transat initiated the process that will result in the creation of two new classes of shares replacing its common shares, as described in the draft Articles of Amendment approved by the Company’s shareholders at a special meeting held today. The amendment will be confirmed once authorities issue a Certificate of Amendment, which is expected to come into force on March 4. The amended capital structure will allow Transat to comply with the Canada Transportation Act, which places a 25% maximum on the number of voting rights attached to shares that may be held by non-Canadians.

The main effects of the amendments to Transat’s Articles include:

- authorizing Transat to issue an unlimited number of Class A Variable Voting Shares and Class B Voting Shares;

- converting each issued and outstanding common share which is owned or controlled by a non-Canadian within the meaning of the Canada Transportation Act into one Class A Variable Voting Share;

- converting each issued and outstanding common share which is owned and controlled by a Canadian within the meaning of the Canada Transportation Act into one Class B Voting Share.

After the initial conversion, shares purchased by non-Canadians will automatically be converted into Class A Variable Voting Shares, and shares purchased by Canadians will automatically be converted into Class B Voting Shares, as necessary.

Class A Variable Voting Shares, held by non-Canadians, carry one vote per share, unless the total number of Class A Variable Voting Shares exceeds 25% of all outstanding voting shares, or 25% of the votes cast, in which case the votes attached to each share will be decreased so that all Class A Variable Voting Shares as a class will never represent more than 25% of the total number of votes. Class B Voting Shares, held by Canadians, carry one vote per share. All other privileges attaching to the shares will remain unchanged.

Transat holds 100% of air carrier Air Transat Inc., and as such must comply with the Canada Transportation Act requirement that all air carriers or the owners thereof be Canadian, namely that no more than 25% of the voting rights attaching to its shares be owned or controlled by non-Canadians.

Resolutions adopted today
A total of 92.6% of the votes cast today at the meeting, either in person or by proxy, were voted in favour of the proposed amendment.

The shareholders also approved the amendments to By-law Nos. 1999-1 and 2003-1, both necessary in order to put into place the amendments to the capital structure. The first amended by-law empowers the Board of Directors to implement and apply the necessary restrictions on share ownership. The second amended by-law provides the circumstances which will require a vote by secret ballot at future shareholders’ meetings.

No shareholder exercised its right of dissent with respect to the amendments to the capital structure.

Schedule and record date
The record date for determining the registered shareholders is the close of business on March 3, 2005. As of March 4, 2005, certificates representing the existing shares of Transat will be void and without effect. Holders of common shares should not forward their certificates representing common shares to Transat or its transfer agent. On or about March 8, 2005, Transat or its transfer agent, CIBC Mellon Trust Company, will mail to shareholders who were registered as at the record date, all share certificates representing Class A Variable Voting Shares or Class B Voting Shares to which they are entitled to under the Certificate of Amendment.

Pursuant to the rules of the Toronto Stock Exchange, the Class A Variable Voting Shares and the Class B Voting Shares will commence trading at the opening of business on March 1, 2005, two trading days prior to the record date.

Effect on the conversion of debentures
In addition, these amendments to Transat’s Articles result in changes to the terms and conditions that apply to the conversion of the 9% convertible debentures due in 2007. On March 4, 2005, the date forseen for the coming into force of the Certificate of Amendment, Transat will enter into a supplemental indenture with Computershare Trust Company of Canada as fiduciary. This supplemental indenture will modify the Indenture dated February 19, 2002 so that the debentures owned or controlled by non-Canadians within the meaning of the Canada Transportation Act will be convertible into Class A Variable Voting Shares and debentures owned and controlled by Canadians within the meaning of the Canada Transportation Act will be convertible into Class B Voting Shares.

About Transat A.T. Inc.
Transat A.T. Inc., with its head office in Montreal, is an integrated company specializing in the organization, marketing, and distribution of holiday travel. The core of its business consists of tour operators in Canada and France. Transat is also involved in air transportation, value-added services at travel destinations, as well as in distribution through travel agency networks. Transat is listed on the Toronto Stock Exchange (TSX:TRZ).