Transat A.T. Inc. Reports Results for the Second Quarter of Fiscal 2026

• Q2 FY2026 revenue declined 0.3% YoY to $1,027.6 million.
• Adjusted EBITDA turned negative at -$20.7 million, compared to +$98.4 million in Q2 FY2025.
• Net loss widened to $79.0 million ($1.94/share) from a $22.9 million loss ($0.58/share) prior year.
• Free cash flow dropped to $59.1 million from $142.3 million, though remained positive due to seasonal customer deposits.
• Primary headwinds: Aviation fuel crisis (~$70M impact in March/April), Cuba flight suspension ($81M revenue shortfall), lower Pratt & Whitney GTF engine compensation ($5.2M vs higher prior periods), and higher pilot salaries from a new collective agreement.
• Mitigation: Implemented fuel surcharges, reduced planned capacity for May-October 2026 by ~6%, and plans to apply for up to $150 million under the Government of Canada's LASR facility.
• H1 FY2026 results: Revenue $1,898.3 million (+2.0% YoY), Adjusted EBITDA $12.9 million, Operating Loss $98.8 million, FCF $305.7 million.
• FY2026 capacity guidance revised to +4% to +5% (available seat-miles).

• The Q2 results are a routine negative earnings print that confirms the operational deterioration flagged in April and May. The miss on adjusted EBITDA and the cut to FY26 capacity guidance are fully consistent with the prior updates.
• The stock's 0.0% move into the print indicates the market had already priced in the fuel crisis, Cuba suspension, and capacity cuts. There is no new information to trigger a repricing. The materiality is low; this is a confirmation of a known negative trajectory.

Transat A.T. Inc. is a Canadian leisure travel company operating an airline and a tour operator. The company focuses on sun destinations, primarily serving Canadian travelers to the Caribbean, Mexico, and Europe. It relies heavily on leased aircraft and seasonal demand, making it highly sensitive to fuel prices, geopolitical stability, and foreign exchange fluctuations.