Transat pushes back on Péladeau’s “misleading” claims as proxy fight intensifies

As a high-profile proxy battle looms ahead of a March 10 shareholder vote, Transat A.T., the parent company of Air Transat, is publicly challenging what it describes as “misleading, inaccurate, and incomplete statements” made by Québecor CEO Pierre Karl Péladeau and his investment company, Financière Outremont.

In recent months, Péladeau — who owns approximately 9.5 per cent of Transat’s shares through Financière Outremont — has stepped up his public campaign for change at the Montreal-based leisure airline.

As previously reported, he is proposing that he join the company’s board of directors, alongside Jean-Marc Léger, president of Quebec-based polling firm Leger.

In November, Péladeau sent Transat a letter outlining what he described as “shortcomings," proposing crucial measures to turn the company around.

He later published an open letter in Le Journal, urging fellow shareholders to back his turnaround plan in the upcoming vote.

READ MORE: Pierre Karl Péladeau wants Transat "to becomes the pride of Quebecers again"

Transat’s Senior Director of Communications, Public Affairs and Corporate Responsibility Andréan Gagné responded on Friday (Feb. 20), with a detailed email, shared with media, aimed at clarifying the airline’s position and rebutting several of Péladeau’s claims.

“We wanted to follow up regarding several media appearances, recent advertisements and online postings by Financière Outremont and Pierre Karl Péladeau that, in our view, contain misleading, inaccurate, and incomplete statements for shareholders, while also seeking their support in the current proxy solicitation,” Gagné wrote on behalf of the company. 

“Given the level of public commentary surrounding the process, we want to ensure that media have clear, factual context.”

Gagné directs shareholders to additional information available on VoteTransat.ca, framing the current dispute as one grounded in competing interpretations of Transat’s financial performance, governance, and recovery strategy.

Share price & financial performance

One of Financière Outremont’s central arguments is that Transat has delivered “the worst financial performance in the industry” and that its share price has suffered a drastic drop of 57 per cent over five years.

Transat disputes that characterization.

“Over the past year, Transat’s share price performance has outperformed that of Air Canada and the S&P/TSX Composite Index,” Gagné wrote.

She argues that using 2020 as a starting point “creates a distorted comparison, given the prolonged closure of Canadian borders and the major impact on leisure travel during the pandemic.”

The pandemic hit leisure carriers particularly hard, grounding fleets and slashing revenues as international travel collapsed.

Transat maintains that any evaluation of its longer-term share performance must account for those extraordinary circumstances rather than treating 2020 as a neutral baseline.

Federal debt & the balance sheet

Péladeau has also criticized what he calls the company’s weak balance sheet, pointing to a federal government loan agreement that did not go to a shareholder vote.

Financière Outremont has previously stated that “Every time the company sells assets or raises capital, half of the proceeds will go to repaying the federal debt.”

Transat acknowledges that its government-backed financing has been significant but says the picture is more nuanced.

“The debt with the government was cut in half in 2025, reducing annual interest expenses by $45 million,” Gagné wrote.

She adds that while Péladeau is technically correct about the allocation of proceeds, his description omits a key detail: “While it is not incorrect to say that $0.50 of every dollar invested goes toward federal debt repayment; however, he fails to disclose that any amount repaid by Transat becomes available credit for the company under a credit facility and therefore does not affect its cash flow.”

The airline also notes that the July 2025 restructuring of its federal debt “preserved the full value for shareholders and was followed by an approximately 70 per cent increase in the share price in the week after the refinancing was announced.”

As for the lack of a shareholder vote, Gagné points out that “the Superior Court rejected Mr. Péladeau’s request on this matter in July 2025.”

Governance & industry expertise

Another point of contention is whether Péladeau’s experience leading Québecor, a major telecommunications and media company, translates into running a complex airline.

Financière Outremont has suggested that his track record in telecom and media qualifies him to bring discipline and oversight to Transat. The airline, however, rejects the comparison.

“Contrary to Mr. Péladeau’s assertions, success in unrelated sectors is neither a relevant model nor a guarantee of success for the operation of a highly regulated international airline, whose logistics and safety standards require deep industry expertise from both management and the board,” Gagné wrote.

She stresses that aviation carries unique operational and regulatory risks.

“In air transport, execution risks are high, mistakes are costly, and distractions can have major consequences. Navigating an environment that is constantly changing and often beyond the carriers’ control requires independent governance, rigorous financial discipline and stable, experienced execution.”

Acting in shareholders’ interests?

Péladeau has positioned himself as a defender of shareholder value, arguing that stronger oversight is necessary to restore Quebecers’ confidence in the airline.

Transat is challenging that narrative directly.

“Mr. Péladeau submitted several purchase offers that significantly undervalued Transat — some valuing the company’s equity at $1, and proposing that the company enters into a court-supervised restructuring process,” Gagné wrote.

“Such proposals would have destroyed, or even eliminated, shareholder value. They stand in stark contrast to his current claims of wanting to ‘protect’ shareholders.”

By referencing prior takeover offers, the airline is seeking to highlight what it sees as an inconsistency between Péladeau’s earlier approach — which it characterizes as destructive to equity holders — and his current rhetoric about safeguarding shareholder interests.

Labour relations

Financière Outremont has also raised concerns about what it describes as recent difficult labour relations.

Transat disputes that characterization, emphasizing its track record in collective bargaining.

“Transat operates in a highly unionized and safety-critical sector, where collective bargaining is structured, supervised and transparent,” Gagné wrote. “Negotiations concluded without any disruption to operations, the agreement was ratified, and activities remained stable.”

Air Transat’s pilots, notably, ratified a new five-year employment contract in January, concluding negotiations that almost resulted in a strike at the airline in December.

Transat says history demonstrates resilience rather than dysfunction.

“Since its first flight 38 years ago, Transat has never experienced a labour dispute, thanks to constructive and harmonious relations with the unions representing its unionized employees,” Gagné wrote.

“Change” without a plan?

A central theme of Péladeau’s campaign has been the need for change. Yet Transat says those calls have not been accompanied by concrete proposals.

“Mr. Péladeau has presented no plan,” Gagné wrote.

“Although Financière Outremont is calling for change, it has provided shareholders with no clear strategic or operational plan for Transat’s future, despite our requests. No details have been provided regarding fleet strategy, financing, partnerships, labour relations or how value would be created for all shareholders.”

The airline contrasts that with what it describes as a carefully developed and already-underway recovery plan.

“Shareholders deserve a credible and concrete plan. This is why Transat’s recovery plan, carefully developed, already underway and producing results — as demonstrated by the 2025 financial year — is the right path forward,” Gagné wrote.

The plan includes the execution of Transat’s Elevation program, targeting approximately $100 million in adjusted operating income improvement by mid-2026; adding new destinations to reduce seasonality and increasing capacity in Africa, Europe and South America; and improving aircraft availability following a global issue affecting certain Pratt & Whitney engine types.

The company has also expanded its joint venture with Porter while broadening codeshare and interline agreements.

As reported, Transat has also launched a loyalty program with Desjardins and Visa.

https://www.paxnews.com/news/airline/air-transat-launch-loyalty-program-desjardins-visa

Dispute over board seat conditions

Financière Outremont has also claimed that it refused a board seat due to “unacceptable conditions.”

But Transat says the conditions were standard.

“These were in fact standard provisions that would have been required of any activist shareholder in similar circumstances, including a voting support commitment and limited obligations to ensure the activist shareholder refrains from launching another proxy contest during a reasonable and agreed-upon standstill period,” Gagné wrote.

“These measures were intended to allow the reconstituted board to operate with stability during the recovery period and are entirely customary and, in fact, those proposed by Transat were even less restrictive than what is typically required, in negotiated board representation agreements made in the interest of the company and all its shareholders.”

Board renewal underway

The airline also points to what it describes as an ongoing and structured renewal of its board.

“A structured and orderly evolution of the Board has been underway since 2022, with approximately 70 per cent renewal between 2022 and 2026, aligned with the company’s transition from stabilization to recovery and return to profitability,” Gagné wrote.

“It is now time to adopt a smaller, more agile Board.”

Under the proposal being put to shareholders, the board would be reduced from 11 to eight members, with four new independent directors joining.

Many of the proposed additions, the company says, bring operational expertise from international airlines.

High stakes ahead of March vote

With the March 10 vote approaching, the dispute has evolved into a broader debate over governance, financial stewardship, and the airline’s strategic direction.

Péladeau has argued that stronger oversight is necessary to restore confidence and unlock value.

Transat, for its part, maintains that its recovery plan is gaining traction and that destabilizing governance at this stage could jeopardize progress.

By issuing a point-by-point rebuttal, the airline is attempting to reframe the narrative ahead of the vote — emphasizing recent share performance, debt restructuring, operational stability, and board renewal.

As Gagné put it in her letter, “Shareholders deserve facts.”

On March 10, they will decide which version of those facts — and which vision for the airline’s future — they find more persuasive.

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