Transat Q3 Results Slammed by Fuel Costs, Suspension of Cuba Flights

The struggles continue for Transat.

Transat A.T. reported higher revenues but a sharp deterioration in profitability in its third quarter, as elevated fuel prices, increased labour costs and the suspension of Cuba flights weighed on results.

For the quarter ended July 31, Transat reported revenues of $792.7 million, up 3% from $766.3 million a year earlier. The company recorded a net loss of $106.6 million, compared with net income of $399.8 million in the same quarter last year. That figure is somewhat misleading, however, as the 2025 result included a one-time $345.1-million gain related to debt relief.

Adjusted EBITDA was negative $0.9 million, compared with positive adjusted EBITDA of $81.2 million a year earlier.

Transat President and CEO Annick Guérard said sustained higher fuel prices were the primary driver of the weaker profitability. Fuel costs increased by $105 million year over year during the quarter, reflecting a 56% increase in fuel prices. Transat estimates the cumulative impact of the fuel-price crisis at approximately $175 million.

Competitive conditions limited Transat’s ability to pass those costs on to travellers. Traffic increased 6% and overall capacity was also up 6%, including an 8% increase in transatlantic capacity, but yield declined 1%. Load factor slipped slightly to 84.7% from 85% a year earlier. The suspension of Cuba flying reduced quarterly revenue by $35 million.

For the first nine months of fiscal 2026, Transat generated revenue of $2.69 billion, up 2% year over year. Adjusted EBITDA, however, fell sharply to $11.9 million from $199.6 million. The suspension of Cuba flights since Feb. 9 reduced nine-month revenue by $116 million.

Transat has also bolstered its liquidity with government-backed financing. It has now fully drawn a $150-million Liquidity for Airline Sector Resilience facility and subsequently secured an additional $250 million in financing through the Canada Enterprise Emergency Fund under its existing LEEFF agreement.

Looking ahead, Transat says fourth-quarter load factors are currently 0.6 percentage points ahead of the same point last year, while yields are broadly in line with 2025. The company expects fourth-quarter capacity to increase 2% year over year.

Guérard said Transat remains focused on restoring profitability through cost reductions and productivity improvements, while moving ahead with the launch of its loyalty program by the end of 2026 and an expansion of its Premium offering beginning in the second half of 2027.