Transat Posts “Disappointing” Q2 Net Loss of $79 Million

Transat A.T. Inc. has reported its second quarter 2026 financial results for the period ended April 30, and they’re not pretty, due to a number of facts the company describes as beyond its control.

“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,” said Annick Guérard, President and Chief Executive Officer

“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,” Guérard added,

Transat has implemented specific measures to mitigate these adverse effects, including surcharges on new bookings and selective capacity adjustments across its network. 

The company says that 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.

In the current adverse environment, Transat says it welcomes the Government of Canada’s “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,” Guérard said.

Chief Financial Officer Jean-François Pruneau said 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 pilots.

Key second quarter indicators included:

• 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, versus net loss of $22.9 million last year.
• Free cash flow 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.

Looking Ahead

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, Transat expects a 4% to 5% increase in capacity, measured in available seat-miles, compared to 2025.