Transat A.T. reports larger Q1 net loss from a year ago, revenue up

Transat A.T. on Thursday (March 13) posted a Q1 net loss of $122.5 million, compared with a loss of $61 million in the same quarter last year.

The Montreal-based company says the loss amounted to $3.10 per diluted share for the quarter ended Jan. 31, compared with a loss of $1.58 per diluted share a year earlier.

Revenue for the quarter, however, totalled $829.5 million, which is up from $785.5 million a year ago.

In a statement, Annick Guérard, president and CEO of Transat, said the first quarter of fiscal 2025 “ended with a better performance compared to the same period last year despite economic uncertainty.”

Higher traffic and a disciplined capacity increase of 0.5 per cent resulted in a yield improvement of 1.7 per cent year-over-year,

Transat's financial results also progressed with revenue growing 5.6 per cent from the first quarter last year and adjusted EBITDA totalling $20.0 million driven by reduced fuel costs and a tight control on operating expenses, Guérard said.

Elevation Program continues

Meanwhile, Transat’s Elevation Program, an optimization plan announced last year that maximizes long-term profitable growth, continues to advance as anticipated, Guérard said.

Once fully deployed, the initiatives implemented to date are expected to generate an annualized adjusted EBITDA run-rate of $37 million, she said.

“The program remains on track to reach $100 million by mid-2026,” she said. “The initial phase has optimized our organizational cost structure, with efficiency gains and cost savings generated through the implementation of new technology tools and AI.”

“In the upcoming months, we will move forward revenue management initiatives and various productivity measures to further bolster profitable growth.”

The CEO added that the refinancing of Transat’s debt of more than $800 million, and the strengthening of its balance sheet, remain “top priorities.”

“Assisted by a special advisory committee of the Board of Directors composed of independent directors, we continue to explore all alternatives that will allow us to implement an optimal capital structure over the long term,” Guérard said. “Although they have not yet led to a permanent solution, discussions with our main lender, the Federal Government, initiated more than 18 months ago, and other stakeholders are still ongoing.”

Given the complexity of these discussions, Transat recently extended the maturity dates of its subordinated and secured LEEFF financing agreements with the federal government to April 2027 and November 2026, respectively.

“Additionally, we renegotiated our revolving credit facility, extending its maturity to November 2026," said Guérard.

Transat says its increase in revenues is attributable to a 1.7 per cent increase in airline unit revenues (yield) and a 1.0 per cent increase in traffic expressed in revenue-passenger-miles compared with 2024.

For 2025, Transat expects to increase its capacity by two per cent, with potential adjustments depending on the evolving situation with Pratt & Whitney GTF2 engine issues.

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