Second-quarter highlights:
Revenues of $1,027.6 million, down 0.3% from $1,031.1 million last year
Negative adjusted EBITDA1 of $20.7 million, compared to an adjusted EBITDA1 of $98.4 million last year
Net loss of $79.0 million ($1.94 per share), versus net loss of $22.9 million ($0.58 per share) last year
Free cash flow1 of $59.1 million, compared to $142.3 million last year
Cash and cash equivalents of $390.1 million as at April 30, 2026
Repayment of $55.0 million of long-term debt, bringing the balance of long-term debt and deferred government grant to $320.0 million, compared to $812.2 million last year
Intent to apply to the Government of Canada's new Liquidity for Airline Sector Resilience facility for up to $150 million in funding to help offsetting the prolonged impact of rising fuel costs
MONTRÉAL, June 11, 2026 /CNW/ - Transat A.T. Inc. reported today its second quarter 2026 financial results ended on April 30.
"Following a solid first quarter that continued the positive momentum of fiscal 2025 and reflected the tangible benefits of our strategic initiatives, second-quarter results were disappointing as factors largely beyond our control severely impacted profitability. The suspension of flights to Cuba and the material increase in aviation fuel prices, an industry-wide crisis, resulted in an estimated negative impact of $95 million on adjusted EBITDA¹, of which approximately $70 million is attributable to higher fuel costs in March and April. The impact of rising aviation fuel prices persisted through May, resulting in additional costs compared to the same period last year. Transat has implemented specific measures to mitigate these adverse effects, including surcharges on new bookings and selective capacity adjustments across its network. While surcharges on new bookings were initially well absorbed by consumers and effectively mitigated the impact of rising fuel costs, recent market volatility has weakened pricing power," said Annick Guérard, President and Chief Executive Officer of Transat.
"We welcome the introduction by the Government of Canada of the Liquidity for Airline Sector Resilience (LASR) facility, which acknowledges the significant fuel cost pressures currently facing airlines. This initiative reflects the essential role aviation plays in the Canadian economy. Transat intends to apply to the LASR facility, which would provide meaningful support as we continue to navigate the current environment with discipline while maintaining our focus on customers and stakeholders," added Annick Guérard.
"Second-quarter adjusted EBITDA¹ declined significantly year-over-year, driven primarily by the surge in aviation fuel costs and the prolonged suspension of flights to Cuba. Profitability was further affected by lower financial compensation from Pratt & Whitney related to the ongoing engine issue, as well as higher salaries and benefits resulting from the new collective agreement with our pilots. Transat intends to apply to the LASR facility, administered by the Canada Enterprise Emergency Funding Corporation (CEEFC), which would provide additional financial flexibility as we remain focused on executing our strategic priorities," said Jean-François Pruneau, Chief Financial Officer of Transat.
Second-quarter results
For the quarter ended April 30, 2026, revenues reached $1,027.6 million, down 0.3% from $1,031.1 million in the corresponding period last year. The decrease in revenues was attributable to the suspension of flights to Cuba, resulting in a revenue shortfall of $81.0 million compared with 2025, as well as to the financial compensation from the original equipment manufacturer of GTF2 engines of $5.2 million, which was down $14.7 million from the second quarter of 2025. The decrease in revenues was partially offset by a 3.9% increase in traffic, expressed in revenue-passenger-miles. For the quarter, across the entire network, the capacity increased by 4.8%, compared with 2025, while the capacity for sun routes, the main program during this period, increased by 1.7%. Airline unit revenues (yield) decreased by 0.7%. Persistent issues with Pratt & Whitney's GTF2 engines continued to result in less effective revenue management, alongside inefficiencies caused by having to unexpectedly redeploy part of the capacity after suspending flights to Cuba in peak season, owing to fuel supply issues at destination airports.
Adjusted EBITDA1 amounted to negative $20.7 million, compared with positive $98.4 million in 2025. This variation resulted primarily from higher fuel prices, the suspension of flights to Cuba, the increase in salaries and employee benefits and from the decrease in the financial compensation from the original equipment manufacturer of the GTF2 engines, compared with fiscal 2025.
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2 Geared turbofan ("GTF ")
Six-month results
For the six-month period ended April 30, 2026, revenues reached $1,898.3 million, up 2.0% from $1,860.6 million, compared with 2025, despite a $53.0 million decline in revenue in the Cuban market, due to the suspension of flights to Cuba. The variation is attributable to a 3.1% increase in traffic and by a 0.2% increase in yield. Network-wide capacity increased by 3.0% compared to the same period in 2025, while the capacity for sun routes, the main program during this period, increased by 2.6%. However, the increase in revenue was reined in by persistent issues with the Pratt & Whitney GTF2 engines which continued to result in less effective revenue management, alongside inefficiencies caused by having to unexpectedly redeploy part of the capacity after suspending flights to Cuba, increased competition and economic conditions.
For the six-month period, adjusted EBITDA1 totaled $12.9 million, compared with $118.4 million for fiscal 2025. The decrease was mainly attributable to a marked increase in fuel prices, higher salaries and employee benefits and a lower financial compensation from the original equipment manufacturer of the GTF[1] engines, compared with fiscal 2025. The disruptions caused by Hurricane Melissa during the first quarter of 2026, combined with those resulting from the repositioning of capacity following the suspension of flights to Cuba, also contributed to the operating loss.
Cash flow and financial position
Cash flows related to operating activities generated $118.3 million during the second quarter of 2026, compared with a cash generation of $207.8 million for the same period last year, mainly due to lower profitability this year versus last. After accounting for investing activities and repayment of lease liabilities, free cash flow1 was $59.1 million during the quarter, compared with $142.3 million for the corresponding period last year.
As at April 30, 2026, cash and cash equivalents stood at $390.1 million, compared to $164.9 million as at October 31, 2025. Cash and cash equivalents in trust or otherwise reserved mainly resulting from travel package bookings totaled $193.6 million as at April 30, 2026, compared with $430.0 million as at October 31, 2025, reflecting the seasonal nature of operations.
Customers deposits for future travel totaled $955.1 million as at April 30, 2026, compared to $823.3 million as at October 31, 2025.
Long-term debt and deferred government grant totaled $320.0 million as at April 30, 2026, compared to $400.0 million as at October 31, 2025. This decrease is attributable to the repayment of $50.0 million on the Corporation's revolving term credit facility and $30.0 million on its subordinated working capital facility during the six-month period.
Long–term debt and deferred government grant, net of cash and cash equivalents, stood at a net cash position of $70.1 million, compared to a net debt position of $235.1 million as at October 31, 2025.
Key indicators
To date, load factors for the summer period, which consists of the third and fourth quarter, are 0.6 percentage points higher compared to the same date in fiscal 2025, while airline unit revenues, expressed as yield, are 0.6% higher than they were at this time last year.
For fiscal year 2026, the Corporation expects a 4% to 5% increase in capacity, measured in available seat-miles, compared to 2025.
Conference call
The second quarter 2026 conference call will take place on Thursday, June 11, 2026, 10:00 a.m. To join the conference call without operator assistance, you may register by entering your phone number here to receive an instant automated call back.
You can also dial direct to be entered into the call by an operator:Montreal: 514 400-3794North America (toll-free): 1 800 990-4777Name of conference: Transat The conference will also be accessible live via webcast: click here to register.
An audio replay will be available until June 18, 2026, by dialing 1 888 660-6345 (toll-free in North America), access code 38236 followed by the pound key (#). The webcast will remain available for 90 days following the call.
(1) Non-IFRS financial measures
Transat prepares its financial statements in accordance with International Financial Reporting Standards ["IFRS"]. We will occasionally refer to non-IFRS financial measures in the news release. These non-IFRS financial measures do not have any meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. They are intended to provide additional information and should not be considered as a substitute for measures of performance prepared in accordance with IFRS. All dollar figures are in Canadian dollars unless otherwise indicated.
The following are non-IFRS financial measures used by management as indicators to evaluate ongoing and recurring operational performance.
Adjusted operating income (loss) or adjusted EBITDA: Operating income (loss) before depreciation, amortization and asset impairment expense, reversal of impairment of the investment in a joint venture, the effect of changes in discount rates used for accretion of the provision for return conditions, changes in market price of CORSIA Eligible Emissions Units (carbon credits), restructuring costs and other significant unusual items, and including premiums related to derivatives that matured during the period. The Corporation uses this measure to assess the operational performance of its activities before the aforementioned items to ensure better comparability of financial results. Adjusted operating income is also used to calculate variable compensation for employees and senior executives.
Adjusted pre-tax income (loss) or ...
