This press release is issued pursuant to National Instrument 62-104 - Take-Over Bids and Issuer Bids and National Instrument 62-103 - The Early Warning System and Related Take-Over Bid and Insider Reporting Issues.

Vancouver, British Columbia--(Newsfile Corp. - December 27, 2018) - On December 27, 2018 SmartLynx Airlines SIA ("SmartLynx") acquired 22,727,272 subscription receipts (the "Subscription Receipts") of Canada Jetlines Ltd. (TSXV: JET) ("Jetlines"), at a price of C$0.33 per Subscription Receipt, for total consideration of C$7,499,999.76 (the "Subscription Amount"), pursuant to a private placement (the "Private Placement").

The Subscription Receipts were issued pursuant to the terms of a Subscription Receipt Agreement (the "Subscription Receipt Agreement") among Jetlines, SmartLynx and Computershare Trust Company of Canada (the "Escrow Agent"). SmartLynx also has the option exercisable for a period of twelve months following the closing of the Private Placement to complete a second financing for variable voting shares of Jetlines for additional gross proceeds of up to $7.5 million at the discounted market price at the time it exercises its option.

Each Subscription Receipt entitles SmartLynx to receive, without payment of additional consideration or further action on the part of SmartLynx, one unit of Jetlines (each a "Unit" and collectively the "Units"), upon receipt by the Escrow Agent, prior to August 31, 2019 of a release notice from Jetlines and SmartLynx confirming that: (a) Jetlines has raised additional gross proceeds of $40 million from a subsequent financing by May 31, 2019 (such completion date subject to waiver by SmartLynx); (b) the receipt by Jetlines' subsidiary, Canada Jetlines Operations Ltd., of its air operator certificate from Transport Canada; and (c) no termination event has occurred (the "Escrow Release Conditions").

Each Unit will consist of one variable voting share of Jetlines and one common share purchase warrant (each, a "Warrant"). Each Warrant shall entitle SmartLynx to purchase one variable voting share of Jetlines at a price of $0.45 at any time up to 5:00 p.m. (Vancouver time) on the date which is 36 months from the closing date.

Prior to the closing of the Private Placement, SmartLynx held no securities of Jetlines. Upon completion of the Private Placement, SmartLynx acquired 22,727,272 Subscription Receipts which, upon satisfaction of the Escrow Release Conditions and automatic conversion of the Subscription Receipts into Units, will result in SmartLynx holding:

• 22,727,272 variable voting shares of Jetlines representing approximately 23.5% of Jetlines' total common shares and variable voting shares issued and outstanding (assuming conversion of all Subscription Receipts); and

• Warrants to purchase a further 22,727,272 variable voting shares which, if exercised in full by SmartLynx, will result in SmartLynx having acquired a total of 45,454,544 variable voting shares of Jetlines in connection with the Private Placement, representing approximately 38% of Jetlines' total common shares and variable voting shares issued and outstanding (assuming conversion of all Subscription Receipts).

In the event that the Escrow Release Conditions are not satisfied within the prescribed timeframe, the Subscription Amount will be returned to SmartLynx, the Subscription Receipts will terminate, and no Units will be issued.

The Subscription Receipts purchased by SmartLynx were purchased and are presently being held only for investment purposes. SmartLynx may from time to time in the future increase or decrease its ownership, control or direction over the securities of Jetlines, through market transactions, private agreements or otherwise.

The details of the Private Placement are disclosed in press releases of Jetlines dated November 27, 2018 and December 27, 2018, copies of which have been electronically filed by Jetlines with applicable Canadian securities regulators and are available for viewing on the SEDAR profile of Jetlines at

An Early Warning Report to which this press release relates will be filed with the applicable securities commissions using SEDAR and can be obtained from SmartLynx at or or on the SEDAR profile of Jetlines at

For further information, please contact:

Skirmantas Sutkus
VP Finance
SmartLynx Airlines SIA
Mazrudas, Marupe Municipality
LV-2167, Latvia
Tel:
Email:

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) has reviewed or accepts responsibility for the adequacy or accuracy of this release.

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