Shareholders reject Péladeau’s bid to gain control of Transat board

Shareholders of Transat A.T. Inc. have voted down an attempt by media executive Pierre Karl Péladeau to gain significant influence over the company’s board of directors, reports the Canadian Press.

During the company’s annual meeting held Tuesday (March 10) in Montreal, Péladeau, chief executive of Quebecor, sought shareholder support to appoint himself and two associates to Transat’s board.

His proposal, as previously reported, would have reduced the size of Transat’s board, giving the three nominees half of the available seats. However, the plan failed to secure enough backing from investors.

Péladeau’s investment firm, Financière Outremont Inc., owns about 9.5 per cent of Transat’s shares, making it the company’s second-largest shareholder.

In December, he called major changes at Transat, including a strategic review and restructuring.

Alongside Péladeau, the proposed slate of directors included economist and pollster Jean-Marc Léger and Quebecor vice-chair André Brosseau.

Péladeau has previously criticized Transat’s leadership, most recently in 2021 after his attempts to acquire the tour operator fell through.

Despite his latest effort, several major institutional investors and proxy advisory firms — including Glass Lewis and Institutional Shareholder Services — supported Transat’s existing board nominees instead.

Large Quebec-based investors such as the Fonds de solidarité FTQ and the Caisse de dépôt et placement du Québec also publicly opposed Péladeau’s proposal ahead of the vote.

Still in the red

Although Transat prevailed in the governance dispute, the company continues to face financial challenges. In its Q1 report, released Tuesday, the company posted a net loss of $29.5 million for the three months ending Jan. 31.

While still in the red, the result marked an improvement from the $122.5 million loss recorded during the same period last year.

Revenue rose five per cent year over year to $870.5 million, helped by stronger passenger traffic.

The airline also reported a slight increase in yield, which measures the average revenue generated per paying passenger for each mile flown.

“Overall, our achievements demonstrate that Transat is moving in the right direction in laying the foundation for long-term shareholder value creation," said Annick Guérard, president and CEO of Transat, in a press release.

However, several factors have weighed on the company’s performance.

Trip disruptions in Jamaica following Hurricane Melissa last October hurt bookings, while an ongoing recall of Pratt & Whitney turbofan engines has grounded several Air Transat aircraft, affecting operations.

More recently, the airline, alongside Air Canada and WestJet, suspended all flights to Cuba until the end of April after U.S. restrictions on Venezuelan oil shipments caused a fuel shortage on the island.

“We will continue to monitor the situation closely to determine when flights to Cuba can safely resume," Guérard said. 

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