Transat A.T. Inc. completes acquisition of British tour operator Canadian Affair

Montreal, August 1, 2006

Transat A.T. Inc., one of the largest integrated tourism companies in the world and Canada's holiday travel leader, has now completed the acquisition of all of the shares of British tour operator The Airline Seat Company (TASC), which operates under the Canadian Affair brand, for £20.4 million in cash (approximately C$42.8 million).

Established in 1995, TASC is one of the largest British tour operators specializing on U.K.-Canada routes, with 200,000 return seats and annual sales of approximately £75 million (approximately C$155 million).

"This acquisition squares perfectly with the strategic plan we adopted in 2005 that states our intention to expand the scope of Transat as an outgoing tour operator in Europe, building on our already significant position. In addition, TASC is very strong on direct sales to the consumer, which represent the fastest growing market segment in the U.K. This considerably enhances the strategic value of this acquisition," said Jean-Marc Eustache, President and Chief Executive Officer of Transat A.T. Inc.

Transat is already very active in Europe. The U.K. alone represents 200,000 return seats between Canada and London, Birmingham, Edinburgh, Exeter, Glasgow, Manchester, Newcastle and Belfast, as well as Shannon and Dublin in the Republic of Ireland.

Transat A.T. Inc., with its head offices 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, France and now the United Kingdom. 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.B; TRZ.A)