Progress: Transat Returns to Profit in Q3 As Yields Improve

Higher revenues and yields, combined with favourable fuel costs and tight control of expenses, helped Transat post a strong result for the third quarter of its fiscal year.

“Transat delivered improved operating and financial performances in the third quarter of fiscal 2025. Revenues grew 4.1%, driven by a 2.6% year-over-year yield improvement and a 1.0% passenger traffic increase,” said Annick Guérard, President and Chief Executive Officer.

“Benefits from our Elevation Program, a comprehensive optimization plan aimed at maximizing long-term profitable growth, are materializing as anticipated and continue to drive results towards generating adjusted EBITDA of $100 million by mid-2026,” Guérard added. 

The company reported a net income of $399.8 million in its latest quarter compared with a loss of $39.9 million in the same quarter last year, as its revenue rose 4.1%. The profit amounted to $9.97 per share for the quarter ended July 31, compared with a loss of $1.03 per share a year earlier. On an adjusted basis, Transat says it had a loss of 28 cents per share in its latest quarter, compared with an adjusted loss of 93 cents per share in the same quarter last year.

“Looking ahead, economic uncertainty and capacity redeployment across the industry are posing short-term challenges for load factors, and we do not expect fuel costs to provide the same significant tailwind as they did so far this year,” Guérard said. 

“In this context, we are maintaining our focus on executing our business strategy through disciplined cost management, fleet optimization and network expansion. As for the upcoming winter season, we are excited with our broader offering. With new destinations in South America and Türkiye, along with the extension of  transatlantic services, we are pursuing our diversification strategy to offer more leisure travel options,” added Guérard.

Transat came out of the pandemic saddled with debt, with the Government of Canada as a major creditor. Chief Financial Officer Jean-François Pruneau says renegotiating its debt was a big achievement this year.

“Closing our refinancing agreement during the third quarter was a key milestone in achieving our objectives of reducing debt and strengthening our balance sheet. We also partly monetized our financial compensation from the manufacturer of the GTF2 engines for 2025 through two sale-leaseback transactions, and proceeds were partially used to further repay debt and redeem preferred shares. With a significantly improved capital structure, we can concentrate more efficiently on carrying out our strategic plan and driving long-term operational progress,” Pruneau said.