Transat’s Q2: Revenue Growth, Improved Productivity and Restructured Debt

Transat A.T. Inc. reported its second quarter 2025 financial results today, shortly after last week’s good newsthat it had reached a debt restructuring deal with a federal agency that lent the company hundreds of millions during the pandemic. 

“Transat delivered improved operating and financial performances in the second quarter of fiscal 2025, building on the positive momentum that began in the fourth quarter of 2024,” said Annick Guérard, President and Chief Executive Officer.

“During the second quarter, revenue grew 5.9%, driven by a 2.0% year-over-year yield improvement and a 1.6% passenger traffic increase. Tight control of operating expenses led to productivity gains, while lower fuel costs further supported performance, resulting in adjusted EBITDA of $98.4 million.” 

Guérard continued: “Despite persistent economic uncertainty, Transat is methodically executing its business strategy through disciplined fleet optimization and network expansion. Recent additions of new routes and changes to our program have further strengthened our leadership in providing leisure travel services to Canadian consumers.” 

The CEO said Transat continues to make progress through its Elevation Program, an optimization plan aimed at maximizing long-term profitable growth. The initiatives implemented to date are expected to generate an annualized adjusted EBITDA run rate of $67 million and the company remains on track to reach its goal of $100 million. 

The debt restructuring deal achieved with the Canada Enterprise Emergency Funding Corporation was critical for the company going forward, said Jean-François Pruneau, Chief Financial Officer.

As of April 30, 2025, this debt had a principal amount of $773.4 million and a carrying value of $762.2 million, including the deferred government grant amount. Following the transaction, outstanding debt with CEEFC is expected to decrease from $773.4 million to $333.7 million.

“We are pleased to have reached a refinancing agreement with our main lender. This represents a major milestone, as it significantly reduces our debt, strengthens our balance sheet, and positions Transat to further implement its long-term strategic plan. In addition, we have reached a new compensation agreement with the manufacturer of the GTF2 engines for the 2025 and 2026 fiscal years, partially recorded during the second quarter as non-cash revenue. We are currently evaluating opportunities to monetize this financial compensation.”

To date, load factors for the summer period, which consists of the third and fourth quarters, are 1.2 percentage points lower compared to the same date in fiscal 2024, while airline unit revenues, expressed as yield, are 1.7% higher than they were at this time last year.

For fiscal year 2025, Transat expects an available capacity increase of 1.0%, measured in available seat-miles, compared to 2024.