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| Information Source: Transat A.T. Inc |
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Revenue Growth and Improved Productivity Balance Sheet Strengthened through Debt Restructuring Agreement |
| Second-quarter highlights: |
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| Transat A.T. Inc. today reported its second quarter 2025 financial results. |
| "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. 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. Despite persistent economic uncertainty, Transat is methodically executing its business strategy through disciplined fleet optimisation 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," said Annick Guérard, President and Chief Executive Officer of Transat. |
| "We are making significant progress through our Elevation Program, a comprehensive optimisation plan aimed at maximising long-term profitable growth. The initiatives implemented to date are expected to generate an annualised adjusted EBITDA run rate of $67 million, and we remain on track to reach our goal of $100 million. Our teams are fully committed to successfully executing the plan, and we expect to benefit directly from cost-saving and revenue-generating initiatives beginning in the second half of the current year," added Ms. Guérard. |
| "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 monetise this financial compensation," said Jean-François Pruneau, Chief Financial Officer of Transat. |
| Second-quarter results |
| For the quarter ended April 30, 2025, revenues reached $1,031.1 million, up 5.9% from $973.2 million in the corresponding period last year. The increase was mainly attributable to a 2.0% increase in airline unit revenues (yield) and a 1.6% increase in traffic expressed in revenue-passenger-miles (RPM) compared with 2024. Reflecting disciplined management, the Corporation's capacity was up 2.6% from the corresponding period last year, while capacity for sun routes, the main program during this period, remained stable. In addition, following the agreement entered into with the original equipment manufacturer of the GTF2 engines, a financial compensation of $20.0 million was recorded in revenues. |
| Adjusted EBITDA1 amounted to $98.4 million, compared with $30.2 million in 2024. This increase was mainly attributable to higher revenues, increased productivity, as well as an 18% decrease in fuel prices compared with the corresponding period of 2024. |
| Six-month results |
| For the six months ended April 30, 2025, revenues reached $1,860.6 million, up 5.8% from $1,758.7 million in the corresponding period a year ago. For the six months, network-wide capacity increased by 1.6% compared with 2024, while capacity for sun routes, the main program during this period, increased by 0.5%. Overall, traffic was 1.3% higher than in 2024. The revenue increase also reflects the financial compensation noted above. |
| For the six months, adjusted EBITDA1 totalled $118.4 million, compared with $26.8 million for fiscal 2024. The increase was mainly attributable to revenue growth, productivity gains and lower fuel prices. |
| Cash flow and financial position |
| Cash flow related to operating activities amounted to $207.8 million during the second quarter of 2025, compared with $183.2 million for the same period last year, mainly due to higher net income before non-cash operating items this year versus last. After accounting for investing activities and repayment of lease liabilities, free cash flow1 reached $142.3 million during the quarter, compared with $109.8 million for the corresponding period last year. |
| As of April 30, 2025, cash and cash equivalents stood at $532.6 million, compared to $260.3 million as of October 31, 2024. Cash and cash equivalents in trust or otherwise reserved, mainly resulting from travel package booking,totalleded $295.6 million as at April 30, 2025, compared with $484.9 million as at October 31, 2024, reflecting the seasonal nature of operationCustomers'ers deposits for future tratotalledaled $888.7 millioofas at April 30, 2025, comparable to the amount recorded a year earlier. |
| During the six months ended April 30, 2025, the Corporation received net proceeds of $30.6 million from the final of the four previously announced spare engine sale-leaseback transactions, completed in early November. |
| Long-term debt and deferred government grant totalled $812.2 million as of April 30, 2025, compared to $803.1 million as of October 31, 2024. Reflecting the proceeds mentioned above and the change in cash, the amount net of cash stood at $279.6 million, down from $542.7 million as at October 31, 2024. |
| Event after the reporting period |
| On June 5, 2025, the Corporation announced that it had reached an agreement in principle with the Canada Enterprise Emergency Funding Corporation (CEEFC) for the restructuring of all its debt contracted under the Large Employer Emergency Financing Facility (LEEFF), managed by the CEEFC. 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. |
| Key indicators |
| 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, the Corporation expects an available capacity increase of 1.0%, measured in available seat-miles, compared to 2024. |
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| Transat A.T. Inc |
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Transat A.T. Inc: Reports Results for the Second Quarter of Fiscal 2025
