Transat Comes Out Fighting in “Pivotal Moment” for the Company

The latest move for Transat in a battle for control with the company’s second-largest shareholder comes in the form of a letter to shareholders recommending a vote in support of the company’s ongoing turnaround plan and its eight nominees for its Board of Directors.

The letter comes as Quebec media tycoon Pierre Karl Peladeau continues a campaign to gain control of Transat through a board shakeup and leadership overhaul. Peladeau’s investment firm Financiere Outremont Inc. owns 9.5% of Transat. He attempted to purchase the company back in December, 2020, matching a low-ball bid by Air Canada in the depths of the pandemic.  

In early December 2025, Peladeau issued a press release alleging that Transat’s balance sheet is “broken.” He called for the company’s board to be reduced to six directors — with him among three new members — from 11 currently. 

Transat’s current leadership is waging a battle to keep shareholders onside. “Your investment deserves better than a shareholder seeking effective control of your company without paying you a premium,” Transat said in a recent press release.

The new letter, mailed to shareholders and available to read here, highlights Transat’s “turnaround momentum, strengthened balance sheet, improved financial results and disciplined execution of its clear strategy as Transat enters the next phase of its strategic plan.”

“We thank the many shareholders who have already voted,” said Susan Kudzman, Chair of the Board. “This is a pivotal moment for Transat. The Board remains focused on executing a clear plan that is delivering measurable results and positioning Transat for sustainable long-term value creation for the benefit of all shareholders.”

Letter Highlights Transat’s Progress and Path Forward

In the letter to shareholders, Transat emphasizes several key developments:

A plan delivering results. Transat says it continues to execute its defined turnaround strategy, including the Elevation Program, which is on track to deliver $100 million uplift in adjusted operating income by mid-2026 through revenue optimization, cost discipline and operational efficiencies.

A materially stronger balance sheet. Following the July 2025 federal debt restructuring, Transat cut its government debt in half and lowered annual interest expense by approximately 90%, improving financial flexibility and protecting shareholder value.

Demonstrated performance momentum. Over the past 12 months, Transat says its share performance has outpaced key benchmarks, reflecting improved operating performance and turnaround progress.

Right-sized, industry-expert and experienced Board. Transat says its eight (8) nominees (four new and four returning directors) bring extensive airline and transportation expertise, independence and strong, experienced oversight, also reflecting constructive engagement with major long-term shareholders. 

Transat’s slate includes a candidate put forward by each of La Caisse de dépôt et placement du Québec and the Fonds de solidarité des travailleurs et travailleuses du Québec (FTQ).

As well as the above arguments, the Transat letter reviews recent public claims by Financière Outremont Inc. and “provides the facts and context to help investors make an informed decision.”

Here are a couple of examples of Financière Outremont’s claims and Transat’s rebuttals:

Transat’s share price is down 57% over five years. 

Transat counters that with its focus on international leisure travel, prolonged border closures and travel restrictions during the COVID pandemic had an outsized impact on the company and its share price. “Using 2020 as the starting point for share-price performance creates a distorted comparison,” Transat says.

“Over the past 12 months, Transat’s shares have outperformed its main Canadian competitor by approximately 27.5 percentage points and the S&P/TSX Composite Index by approximately 16 percentage points.”

Transat has the worst financial performance in the industry.

Transat’s response: “Broad ‘worst in the industry’ claims depend on selective peer sets and selective time windows. What matters now is the recovery trajectory: record adjusted EBITDA in FY2025, improved cash burn of 45%, and a stronger balance sheet than a year ago evidenced by a lower leverage ratio.”

Transat is at risk of insolvency.

“Liquidity is seasonal by nature in aviation,” Transat states. “Cash burn has improved materially year over year.  The balance sheet is materially stronger than it was 12 months ago.”

Financière Outremont is bringing necessary human and financial capital.

Transat’s response: “Experience in unrelated industries does not translate to the ability to run a highly complex, regulated, safety-focused international airline where any missteps could have major consequences.”