Transat A.T. Inc. Reports Results for the Third Quarter of Fiscal 2025

Executive Summary

• Transat A.T. Inc. reported third-quarter fiscal 2025 results showing improved operating and financial performance, with revenues increasing 4.1% year-over-year to $766.3 million.
• The company reported a significant net income of $399.8 million ($9.97 per share), largely driven by a $345.1 million gain from long-term debt restructuring, compared to a net loss of $39.9 million in the prior year period.
• Adjusted EBITDA more than doubled to $81.2 million from $48.0 million, supported by higher yields, increased traffic, and lower fuel costs. The company confirmed its "Elevation Program" is on track to deliver $100 million in adjusted EBITDA by mid-2026.

Key Details

• Q3 Fiscal 2025 Financials:
  • Revenues: $766.3 million (up 4.1% from $736.2 million).
  • Adjusted EBITDA: $81.2 million (up from $48.0 million).
  • Net Income: $399.8 million ($9.97 per share), including a $345.1 million gain from long-term debt restructuring.
  • Net Loss (Prior Year): $39.9 million ($1.03 per share).
  • Free Cash Flow: Negative $122.1 million (improved from negative $168.7 million).
  • Cash and Cash Equivalents: $357.2 million as of July 31, 2025.
• Nine-Month Period (Ended July 31, 2025):
  • Revenues: $2,626.9 million (up 5.3% from $2,494.9 million).
  • Adjusted EBITDA: $199.6 million (up from $74.8 million).
  • Free Cash Flow: Positive $149.3 million (compared to negative $19.8 million).
• Debt Restructuring & Balance Sheet:
  • Conclusion of the LEEFF debt restructuring reduced the amount owed under the program from $762.2 million to $333.9 million.
  • Long-term debt and deferred government grant decreased to $383.9 million from $803.1 million (as of Oct 31, 2024).
  • Renegotiated revolving credit facility on September 5, 2025, extending maturity from November 1, 2026, to November 1, 2027.
• Asset Transactions:
  • Sale-leaseback transactions for two Pratt & Whitney GTF2 engines valued at $61.5 million during Q3.
  • Total sale-leaseback transactions for three GTF2 engines over the nine-month period totaled $92.1 million.
  • Proceeds were used to reduce debt and fund operations.
• Operational Metrics:
  • Yield (airline unit revenues) increased 2.6% year-over-year.
  • Traffic (revenue-passenger-miles) increased 1.0% year-over-year.
  • Capacity increased 2.4% year-over-year; transatlantic capacity increased 4.2%.
  • Fuel prices decreased 14% compared to the same period in 2024.
  • Recorded $7.0 million in financial compensation from the GTF2 engine manufacturer in Q3 revenues.
• Outlook & Guidance:
  • Elevation Program initiatives are on track to deliver $100 million in adjusted EBITDA by mid-2026.
  • Fiscal 2025 capacity (available seat-miles) expected to increase 1.0% compared to 2024.
  • Q4 load factors are 1.2 percentage points lower than the same date in fiscal 2024.
  • New destinations added for winter season include South America and Türkiye, with extended transatlantic services.
• Upcoming Events:
  • Fourth-quarter 2025 results to be announced on December 17, 2025.

Notable Quotes

• "Transat delivered improved operating and financial performances in the third quarter of fiscal 2025. Revenues grew 4.1%, driven by a 2.6% year-over-year yield improvement and a 1.0% passenger traffic increase. Benefits from our Elevation Program... are materializing as anticipated and continue to drive results towards generating adjusted EBITDA of $100 million by mid-2026." — Annick Guérard, President and Chief Executive Officer
• "Closing our refinancing agreement during the third quarter was a key milestone in achieving our objectives of reducing debt and strengthening our balance sheet... With a significantly improved capital structure, we can concentrate more efficiently on carrying out our strategic plan and driving long-term operational progress." — Jean-François Pruneau, Chief Financial Officer