Transat Posts ‘Better Performance’ in Q1, Despite Economic Uncertainty

Transat has announced results for the first quarter ended January 31, 2025. Despite some improvements over the same period last year, the airline, tour operator and retail agency owner says refinancing debt and strengthening the balance sheet remain the top priorities.

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

“Higher traffic and a disciplined capacity increase of 0.5% resulted in a yield improvement of 1.7% year-over-year. Transat’s financial results also progressed with revenue growing 5.6% from the first quarter last year and adjusted EBITDA totaling $20.0 million driven by reduced fuel costs and a tight control on operating expenses.” 

Guérard says the company’s ‘Elevation Program,’ which aims to maximize long-term profitable growth, continues to advance as anticipated. She said the initiatives implemented to date are expected to generate an annualized adjusted EBITDA run-rate of $37 million, and the program remains on track to reach $100 million by mid-2026. 

Debt, much of it accumulated during the pandemic, remains a challenge for Transat.

“The refinancing of our debt of more than $800 million and the strengthening of our balance sheet remain our 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,” she added. 

In the meantime, the company has extended the maturity dates of its subordinated and secured LEEFF financing agreements with the federal government to April 2027 and November 2026, respectively. 

For the three-month period ended January 31, 2025, Transat revenues reached $829.5 million, up 5.6% from the corresponding period last year. The increase in revenues is attributable to a 1.7% increase in airline unit revenues (yield) and a 1.0% increase in traffic expressed in revenue-passenger-miles (RPM) compared with 2024. 

To date, for the second quarter of 2025, load factors are 2 percentage points lower than on the same date in fiscal 2024, while airline unit revenues, expressed in revenue per passenger mile (or “yield”), are 2% higher than in the corresponding period last year. 

While Transat says it is too early to have a complete picture for the summer, winter trends seem to be continuing into summer 2025.