SEDAR Interim Financial Statements

Unaudited As at January 31, 2026 As at October 31, 2025 (in thousands of Canadian dollars) Notes $ $ ASSETS 8 Cash and cash equivalents 386,654 164,920 Cash and cash equivalents in trust or otherwise reserved 3 528,086 430,003 Trade and other receivables 4 183,028 153,575 Income taxes receivable 586 469 Inventories 5 49,852 49,653 Prepaid expenses 45,328 36,683 Derivative financial instruments 20,671 18,251 Current portion of deposits 6 107,586 126,223 Current assets 1,321,791 979,777 Cash and cash equivalents reserved 3 35,589 35,589 Deposits 6 280,402 283,193 Deferred tax assets 282 370 Property, plant and equipment 7 1,210,996 1,254,604 Intangible assets 20,739 21,030 Non-current assets 1,548,008 1,594,786 2,869,799 2,574,563 LIABILITIES Trade and other payables 509,726 376,940 Income taxes payable 2,116 2,182 Customer deposits and deferred revenues 1,089,558 823,276 Derivative financial instruments 44,386 17,564 Current portion of long-term debt and lease liabilities 8 183,958 172,666 Liability related to warrants 9 18,711 14,235 Current portion of provision for return conditions 10 1,769 1,581 Current liabilities 1,850,224 1,408,444 Long-term debt and lease liabilities 8 1,267,824 1,375,548 Deferred government grant 8 195,118 199,182 Provision for return conditions 10 193,715 201,119 Employee benefits liability 26,930 26,829 Deferred tax liabilities 554 548 Preferred shares 11 9,759 7,948 Non-current liabilities 1,693,900 1,811,174 NEGATIVE EQUITY Share capital 11 227,860 227,365 Share-based payment reserve 16,480 16,454 Deficit (910,664) (881,166) Cumulative exchange differences (8,001) (7,708) (674,325) (645,055) 2,869,799 2,574,563 See accompanying notes to the interim unaudited condensed consolidated financial statements On behalf of the Board, Director Director TRANSAT A.T. INC. CONSOLIDATED STATEMENTS OF FINANCIAL POSITION 2026, 1ˢᵗ Quarterly Report Transat A.T. Inc. | 23 Quarters ended January 31 Unaudited 2026 2025 (in thousands of Canadian dollars, except per share amounts) Notes $ $ Revenues 12 870,713 829,505 Operating expenses Costs of providing tourism services 295,063 299,095 Salaries and employee benefits 138,651 127,279 Aircraft fuel 120,227 121,876 Sales and distribution costs 67,456 63,915 Aircraft maintenance 60,184 62,157 Airport and navigation fees 47,841 47,533 Aircraft rent 8 1,527 2,674 Other airline costs 57,095 52,280 Other 39,654 38,609 Depreciation and amortization 61,949 62,965 Restructuring costs 13 220 3,078 889,867 881,461 Operating loss (19,154) (51,956) Financing costs 8 24,388 39,685 Financing income (5,172) (8,220) Change in fair value of derivatives 24,400 (3,462) Revaluation of liability related to warrants and preferred shares 9, 11 6,287 (7) Foreign exchange (gain) loss (39,848) 47,472 Gain on long-term debt extinguishment — (216) Gain on asset disposals 14 — (5,183) Loss before income tax expense (29,209) (122,025) Income taxes Current 289 408 Deferred — 99 289 507 Net loss for the period (29,498) (122,532) Loss per share 11 Basic (0.73) (3.10) Diluted (0.73) (3.10) See accompanying notes to the interim unaudited condensed consolidated financial statements TRANSAT A.T. INC. CONSOLIDATED STATEMENTS OF LOSS 2026, 1ˢᵗ Quarterly Report Transat A.T. Inc. | 24 Quarters ended January 31 Unaudited 2026 2025 (in thousands of Canadian dollars) $ $ Net loss for the period (29,498) (122,532) Other comprehensive loss Items that will be reclassified to net loss Foreign exchange loss on translation of fina --- ncial statements of foreign subsidiaries (293) (239) Total other comprehensive loss (293) (239) Comprehensive loss for the period (29,791) (122,771) CONSOLIDATED STATEMENTS OF CHANGES IN NEGATIVE EQUITY Unaudited Share capital Share-based payment reserve Deficit Cumulative exchange differences Total negative equity (in thousands of Canadian dollars) $ $ $ $ $ Balance as at October 31, 2024 225,438 16,283 (1,123,113) (7,684) (889,076) Net loss for the period — — (122,532) — (122,532) Other comprehensive loss — — — (239) (239) Comprehensive loss for the period — — (122,532) (239) (122,771) Issued from treasury 492 — — — 492 Share-based payment expense — 49 — — 49 Balance as at January 31, 2025 225,930 16,332 (1,245,645) (7,923) (1,011,306) Net income for the period — — 364,448 — 364,448 Other comprehensive income — — 31 215 246 Comprehensive income for the period — — 364,479 215 364,694 Issued from treasury 1,435 — — — 1,435 Share-based payment expense — 122 — — 122 Balance as at October 31, 2025 227,365 16,454 (881,166) (7,708) (645,055) Net loss for the period — — (29,498) — (29,498) Other comprehensive loss — — — (293) (293) Comprehensive loss for the period — — (29,498) (293) (29,791) Issued from treasury 495 — — — 495 Share-based payment expense — 26 — — 26 Balance as at January 31, 2026 227,860 16,480 (910,664) (8,001) (674,325) See accompanying notes to the interim unaudited condensed consolidated financial statements TRANSAT A.T. INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS 2026, 1ˢᵗ Quarterly Report Transat A.T. Inc. | 25 Quarters ended January 31 Unaudited 2026 2025 (in thousands of Canadian dollars) Notes $ $ OPERATING ACTIVITIES Net loss for the period (29,498) (122,532) Operating items not involving an outlay (receipt) of cash: Compensation received in the form of credits 12 (5,080) — Depreciation and amortization 61,949 62,965 Change in fair value of derivatives 24,400 (3,462) Revaluation of liability related to warrants and preferred shares 9, 11 6,287 (7) Foreign exchange (gain) loss (39,848) 47,472 Gain on long-term debt extinguishment — (216) Gain on asset disposals 14 — (5,183) Capitalized interest on long-term debt and lease liabilities — 11,831 Employee benefits 489 477 Share-based payment expense 26 49 Deferred taxes — 99 18,725 (8,507) Net change in non-cash working capital balances related to operations 285,669 170,938 Net change in provision for return conditions (635) 6,132 Net change in other assets and liabilities related to operations (7,362) 15 Cash flows related to operating activities 296,397 168,578 INVESTING ACTIVITIES Additions to property, plant and equipment and other intangible assets (13,654) (22,881) Net proceeds from sale and leaseback of assets 7 — 30,615 Cash flows related to investing activities (13,654) 7,734 FINANCING ACTIVITIES Repayment of lease liabilities 8 (36,186) (47,183) Repayment of long-term debt 8 (25,000) — Proceeds from issuance of shares 11 495 492 Transaction costs — (1,055) Cash flows related to financing activities (60,691) (47,746) Effect of exchange rate changes on cash and cash equivalents (318) 453 Net change in cash and cash equivalents 221,734 129,019 Cash and cash equivalents, beginning of period 164,920 260,336 Cash and cash equivalents, end of period 386,654 389,355 Supplementary information (as reported in operating activities) Net income taxes paid 291 51 Interest received (4,804) (7,635) Interest paid 22,959 26,840 See accompanying notes to the interim unaudi --- ted condensed consolidated financial statements TRANSAT A.T. INC. CONSOLIDATED STATEMENTS OF CASH FLOWS 2026, 1ˢᵗ Quarterly Report Transat A.T. Inc. | 26 [Amounts are expressed in thousands of Canadian dollars, except for per share amounts or unless specified otherwise] [unaudited] Note 1 Corporate information Transat A.T. Inc. [the “Corporation”], headquartered at 300 Léo-Pariseau Street, Montreal, Quebec, Canada, is incorporated under the Canada Business Corporations Act. Its Class A Variable Voting Shares and Class B Voting Shares are listed on the Toronto Stock Exchange and traded under a single ticker, namely “TRZ.” Transat A.T. Inc. is an integrated company specializing in the organization, marketing and distribution of holiday travel. The core of its business consists of a Canadian leisure airline, offering international and Canadian destinations, and is vertically integrated with its other services of holiday packages, distribution through a dynamic travel agency network and value-added services at travel destinations. The interim condensed consolidated financial statements of Transat A.T. Inc. for the quarter ended January 31, 2026 were approved by the Corporation’s Board of Directors on March 9, 2026. The Corporation’s operations are seasonal in nature; consequently, interim operating results do not necessarily proportionately reflect the operating results for a full year. Note 2 Material accounting policies Basis of preparation These interim condensed consolidated financial statements of the Corporation and its subsidiaries have been prepared in accordance with IFRS Accounting Standards [“IFRS”], as issued by the International Accounting Standards Board [“IASB”] and as adopted by the Accounting Standards Board of Canada. These interim condensed consolidated financial statements were prepared in accordance with IAS 34, Interim Financial Reporting. These interim condensed consolidated financial statements are presented in Canadian dollars, the Corporation’s functional currency, except where otherwise indicated. Each entity of the Corporation determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency. The same accounting policies and methods of computation are followed in these interim condensed consolidated financial statements as compared with the most recent annual consolidated financial statements. The interim condensed consolidated financial statements should be read in conjunction with the audited annual consolidated financial statements and notes included in the Corporation’s Annual Report for the year ended October 31, 2025. These interim condensed consolidated financial statements have been prepared on a going concern basis, at historical cost, except for financial assets and liabilities classified as financial assets/liabilities at fair value through profit or loss and financial assets/liabilities at fair value through other comprehensive loss and measured at fair value. Future changes in accounting policies IFRS 9 - Financial Instruments and IFRS 7 - Financial Instruments: Disclosures In May 2024, the IASB issued narrow-scope amendments to IFRS 9 and IFRS 7. The amendments clarify guidance on the classification of financial assets that include environmental, social and corporate governance linked features; they also clarify the date on which a financial asset or financial liability is derecognized when it is settled using an electron --- ic payment system. The amendments will be applicable for fiscal years beginning on or after January 1, 2026, with earlier adoption permitted. The Corporation is currently assessing the potential impact of these amendments on its consolidated financial statements. Transat A.T. Inc. Notes to interim condensed consolidated financial statements 2026, 1ˢᵗ Quarterly Report Transat A.T. Inc. | 27 IFRS 18 - Presentation and Disclosure in Financial Statements In April 2024, the IASB issued IFRS 18, Presentation and Disclosure in Financial Statements, which will replace IAS 1, Presentation of Financial Statements, but will carry forward many requirements from IAS 1. The standard sets out requirements on presentation and disclosures in financial statements. It introduces a defined structure for the statement of income composed of required categories and subtotals. The standard also introduces specific disclosure requirements for management-defined performance measures and a reconciliation between these measures and the most similar subtotal specified in IFRS, which must be disclosed in a single note. IFRS 18 is applicable for fiscal years beginning on or after January 1, 2027, with earlier application permitted. The Corporation is currently assessing the impact of IFRS 18 adoption on its consolidated financial statements. Note 3 Cash and cash equivalents in trust or otherwise reserved As at January 31, 2026, cash and cash equivalents in trust or otherwise reserved included $501,058 [$396,652 as at October 31, 2025] in funds received from customers, primarily Canadians, for services not yet rendered or for which the restriction period had not ended, in accordance with Canadian regulators and the Corporation’s business agreements with certain credit card processors. Cash and cash equivalents in trust or otherwise reserved also included an amount of $62,617, of which $35,589 was recorded as non-current assets [$68,940 as at October 31, 2025, $35,589 of which was recorded as non-current assets], and pledged as collateral security against letters of credit. Note 4 Trade and other receivables As at January 31, 2026 As at October 31, 2025 $ $ Credit card processor receivables 78,753 54,082 Government receivables 37,843 41,673 Trade receivables 20,508 7,943 Cash receivable from lessors 12,705 19,579 Other receivables 33,219 30,298 183,028 153,575 Note 5 Inventories As at January 31, 2026 As at October 31, 2025 $ $ Spare parts and supplies 46,351 44,172 Fuel 3,501 5,481 49,852 49,653 Note 6 Deposits As at January 31, 2026 As at October 31, 2025 $ $ Maintenance deposits with lessors 230,772 232,258 Deposits with credit card processors 97,682 113,652 Deposits on leased aircraft and engines 51,149 52,768 Deposits with suppliers 8,385 10,738 387,988 409,416 Less current portion 107,586 126,223 280,402 283,193 Transat A.T. Inc. Notes to interim condensed consolidated financial statements 2026, 1ˢᵗ Quarterly Report Transat A.T. Inc. | 28 Note 7 Property, plant and equipment Leasehold improvements Fleet Aircraft equipment Office furniture and equipment Land, building and leasehold improvements Right of use Fleet Right of use Real estate and other Total $ $ $ $ $ $ $ Cost Balance as at October 31, 2025 108,067 158,362 41,164 18,515 2,206,252 113,730 2,646,090 Additions — 3,220 579 30 13,267 244 17,340 Write-offs — — — — (1,664) (632) (2,296) Exchange difference — — (49) (32) — (15) (96) Balance as at January 31, 2026 108,067 161,582 41,694 18,513 2,217,855 113,327 --- 2,661,038 Accumulated depreciation Balance as at October 31, 2025 86,041 91,684 34,386 13,124 1,085,712 80,539 1,391,486 Depreciation 1,823 4,130 775 160 52,473 1,552 60,913 Write-offs — — — — (1,664) (632) (2,296) Exchange difference — — (37) (22) — (2) (61) Balance as at January 31, 2026 87,864 95,814 35,124 13,262 1,136,521 81,457 1,450,042 Net book value as at January 31, 2026 20,203 65,768 6,570 5,251 1,081,334 31,870 1,210,996 Property, plant and equipment related to the fleet During the quarter ended January 31, 2025, the Corporation sold a spare Pratt & Whitney GTF engine under a sale and leaseback transaction. The Corporation measured the right-of-use asset resulting from the sale and leaseback transaction in proportion to the previous carrying amount of the asset to which the Corporation retains the right of use. Accordingly, the Corporation recognized a gain on the sale and leaseback of assets of $5,183 [Note 14], which represents the excess of the proceeds from disposal over the lease liability and the change in the asset related to the transaction. Total proceeds received amounted to $30,615, and the Corporation recorded a right-of-use asset of $11,397 and lease liabilities of $18,690, while the carrying amount of the engine sold was $18,139. The spare engine will continue to be operated under the 10-year lease entered into under this sale and leaseback transaction. Transat A.T. Inc. Notes to interim condensed consolidated financial statements 2026, 1ˢᵗ Quarterly Report Transat A.T. Inc. | 29 Note 8 Long-term debt and lease liabilities The following table details the maturities and weighted average interest rates related to long-term debt and lease liabilities as at January 31, 2026 and October 31, 2025. Final maturity Weighted average effective interest rate As at January 31, 2026 As at October 31, 2025 % $ $ Long-term debt Subordinated debt - LEEFF 2035 14.89 67,866 66,052 Unsecured debenture - LEEFF 2035 17.32 57,016 54,766 Subordinated working capital facility - LEEFF 2035 7.00 30,000 30,000 Revolving credit facility 2028 7.06 25,000 50,000 Long-term debt 13.26 179,882 200,818 Lease liabilities Fleet 2026-2036 6.43 1,233,152 1,307,596 Real estate and other 2026-2037 5.45 38,748 39,800 Lease liabilities 6.40 1,271,900 1,347,396 Total long-term debt and lease liabilities 7.25 1,451,782 1,548,214 Current portion of long-term debt (30,000) (25,000) Current portion of lease liabilities (153,958) (147,666) Current portion of long-term debt and lease liabilities (183,958) (172,666) Long-term debt and lease liabilities 1,267,824 1,375,548 Funding from the Government of Canada The Corporation has credit agreements entered into with the Canada Enterprise Emergency Funding Corporation (CEEFC) totalling $333,735. These agreements include subordinated debt of $175,000 granted under the Large Employer Emergency Financing Facility (LEEFF), as well as an unsecured debenture in the amount of $158,735. In addition to these credit agreements, the Corporation was also granted a $75,000 subordinated working capital facility under certain conditions. Under these agreements, the Corporation has made certain commitments, in particular with respect to: • Complying with restrictions on dividends, stock repurchases and executive compensation; • Maintaining active employment at a certain level; • Maintaining spending levels with Canadian suppliers. The credit facilities made available to the Corporation by the CEEFC are as follows: Subordinated d --- ebt - LEEFF An amount of $175,000, in the form of subordinated debt maturing on July 10, 2035. The agreement bears interest at 1.22% until July 10, 2028, at which time it increases to 3.0% until maturity. Mandatory prepayments may be required by the CEEFC as a result of certain events, including, but not limited to, sale and leaseback transactions, asset sales and share issuances. The Corporation would then have to repay an amount equivalent to 50% of the amounts received. In addition, mandatory prepayments may be required until July 10, 2030 in the event that cash flows generated and cash balances exceed certain thresholds. In the event of a change of control, this credit facility becomes immediately due and payable. Under the terms of the agreement, the Corporation is required to comply with certain financial covenants. As at January 31, 2026, the financial covenants were met. The credit facility includes a prepayment option, which is an embedded derivative, the fair value of which is recorded as a reduction of the carrying amount of the credit facility. This embedded derivative is separated from the host contract and designated at fair value through profit or loss, with changes in its fair value recorded in the consolidated statement of loss under Change in fair value of derivatives. As at January 31, 2026, the fair value of the prepayment option was nil. Transat A.T. Inc. Notes to interim condensed consolidated financial statements 2026, 1ˢᵗ Quarterly Report Transat A.T. Inc. | 30 As at January 31, 2026 and as at October 31, 2025, the credit facility was fully drawn, and the carrying amount stood at $67,866 as at January 31, 2026 [$66,052 as at October 31, 2025]. As at January 31, 2026, an amount of $107,134 was also recognized as a deferred government grant related to the Subordinated debt – LEEFF [$108,948 as at October 31, 2025]. During the quarter ended January 31, 2026, an amount of $1,814 [nil for the quarter ended January 31, 2025] was recognized as proceeds from government grants as a reduction of financing costs. Unsecured debenture – LEEFF An initial amount of $158,735, in the form of an unsecured debenture, maturing on July 10, 2035, bearing no interest for the first five years and bearing interest at a rate of 7.0% as of July 11, 2030, increasing by 1.0% per annum thereafter, and repayable as of July 10, 2030 by annual principal payments of $15,873. Mandatory prepayments may be required by the CEEFC as a result of certain events, including, but not limited to, sale and leaseback transactions, asset sales and share issuances. The Corporation would then have to repay an amount equivalent to 50% of the amounts received. In addition, mandatory prepayments may be required until July 10, 2030 in the event that cash flows generated and cash balances exceed certain thresholds. In the event of a change of control, the unsecured debenture becomes immediately due and payable. Under the terms of the agreement, the Corporation is required to comply with certain financial covenants. As at January 31, 2026, the financial covenants were met. As at January 31, 2026, the principal balance payable amounted to $145,000 [$145,000 as at October 31, 2025]. As at January 31, 2026, the carrying amount of the unsecured debenture stood at $57,016, [$54,766l as at October 31, 2025], and an amount of $87,984 [$90,234 as at October 31, 2025 was also recognized as a deferred government grant related to this debenture. During the quarter ended January --- 31, 2026, an amount of $2,250 [nil for the quarter ended January 31, 2025] was recognized as proceeds from government grants as a reduction of financing costs. Subordinated working capital facility – LEEFF The Corporation has a $50,000 second-ranking subordinated working capital facility agreement for its operations that will increase to $75,000 once the Corporation has repaid an amount of $25,000 on its revolving term credit facility agreement. The agreement expires on July 10, 2035 and becomes immediately due and payable in the event of a change in control. Drawdowns may be made up to the cumulative mandatory prepayments made on the Subordinated debt – LEEFF and unsecured debenture, up to the Series 4 Preferred Share redemptions, and up to certain cash thresholds. Repayments become due under certain financial conditions and cash thresholds. The agreement bears interest at the rate of 7.0% until July 10, 2026 and thereafter at the 3-month CORRA rate plus a premium of 4.5% determined on each anniversary date. As at January 31, 2026, the financial covenants were met, and an amount of $30,000 was drawn down under this credit facility. On February 13, 2026, the Corporation repaid the $30,000 balance on its subordinated working capital facility. The facility remains available for future drawdowns. Transat A.T. Inc. Notes to interim condensed consolidated financial statements 2026, 1ˢᵗ Quarterly Report Transat A.T. Inc. | 31 Other credit facilities Revolving term credit facility The Corporation has a $50,000 revolving term credit facility for its operations, maturing on November 1, 2027. The revolving term credit facility agreement can be extended for one year on each anniversary date subject to lender approval and becomes immediately due and payable in the event of a change of control. Under the terms of the agreement, funds may be drawn down by way of bank loans, denominated in Canadian and U.S. dollars. The facility is secured by a first ranking movable hypothec on the universality of assets, present and future, of the Corporation’s Canadian, Mexican, Caribbean and European subsidiaries, subject to certain exceptions. The facility bears interest at the Adjusted Term CORRA rate or SOFR (Secured Overnight Financing Rate) rate in U.S. dollars, plus a premium of 4.5% or at the financial institution’s prime rate, plus a premium of 3.5%. Under the terms of the agreement, the Corporation is required to meet certain financial ratios and covenants. As at January 31, 2026, the financial ratios and covenants were met. On November 21, 2025, the agreement was amended to modify certain financial conditions. The Corporation repaid $25,000 under its facility bringing the balance drawn down to $25,000 as at January 31, 2026 [$50,000 as at October 31, 2025]. During the quarter ended January 31, 2026, the Corporation also renegotiated the agreement to allow the $25,000 repaid to remain available until April 15, 2026. Revolving credit facility – Letters of credit The Corporation has a $74,000 annually renewable revolving credit facility for the issuance of letters of credit. Under the Revolving credit facility agreement – Letters of credit, the Corporation must pledge cash equal to 100% of the amount of the issued letters of credit. As at January 31, 2026, $62,510 had been drawn down under the facility [$68,834 as at October 31, 2025], $35,589 of which was used to secure obligations under senior executive defined benefit pension agreements; this irrevocable --- letter of credit is held by a third-party trustee. In the event of a change of control, the irrevocable letter of credit issued to secure the obligations under senior executive defined benefit pension agreements will be drawn. Transat A.T. Inc. Notes to interim condensed consolidated financial statements 2026, 1ˢᵗ Quarterly Report Transat A.T. Inc. | 32 Financing costs Interest expense for the periods ended January 31, 2026 and 2025, is detailed as follows: Quarters ended January 31 2026 2025 $ $ Interest expense on lease liabilities 20,995 22,622 Interest expense on long-term debt 1,874 14,957 Accretion on provision for return conditions 1,347 1,302 Other interest and costs 172 804 Financing costs 24,388 39,685 Rent expense Rent expense for the periods ended January 31, 2026 and 2025, is detailed as follows: Quarters ended January 31 2026 2025 $ $ Variable lease payments 1,527 1,940 Short-term leases — 734 Aircraft rent 1,527 2,674 Variable lease payments — 94 Short-term leases 559 1,323 Low value leases and variables lease payments 70 67 2,156 4,158 Cash flows related to lease liabilities The following table details cash flows related to repayments of lease liabilities for the period ended January 31, 2026: Cash flows Non-cash changes Total $ $ $ Balance as at October 31, 2025 1,347,396 Repayments (36,186) — (36,186) New lease liabilities (new contracts and amendments) — 2,925 2,925 Exchange difference — (42,235) (42,235) Balance as at January 31, 2026 (36,186) (39,310) 1,271,900 Transat A.T. Inc. Notes to interim condensed consolidated financial statements 2026, 1ˢᵗ Quarterly Report Transat A.T. Inc. | 33 Maturity analysis Repayment of principal and interest on long-term debt and lease liabilities as at January 31, 2026 is detailed as follows. Lease liabilities denominated in U.S. dollars were translated at the USD/CAD closing rate of 1.3558 as at January 31, 2026: Year ending October 31 2026 2027 2028 2029 2030 2031 and up Total $ $ $ $ $ $ $ Long-term debt obligations 33,163 3,885 27,807 5,250 21,124 371,470 462,699 Fleet 181,787 242,117 227,814 206,950 187,357 535,820 1,581,845 Real estate and other 5,194 8,355 4,437 5,192 4,998 20,079 48,255 Lease liabilities 186,981 250,472 232,251 212,142 192,355 555,899 1,630,100 Total 220,144 254,357 260,058 217,392 213,479 927,369 2,092,799 Note 7 provides the information required for right-of-use assets and depreciation. Note 15 details the information required with respect to leases of aircraft that will be delivered in the coming years. Note 9 Liability related to warrants In the context of the initial financing arrangement related to the Subordinated debt – LEEFF [Note 8], on April 29, 2021, the Corporation issued to the Government of Canada a total of 13,000,000 warrants for the purchase of an equivalent number of shares of the Corporation (subject to certain limitations described below), with customary adjustment provisions, at an exercise price of $4.50 per share, and that are exercisable prior to July 10, 2035. On July 10, 2025, as part of the Corporation’s debt restructuring, the maturity date of the 13,000,000 existing warrants was extended to July 10, 2035. The Corporation measured the fair value of the warrants at the debt restructuring date, using the original and revised terms, and recognized the resulting $5,182 fair value loss as a loss on long-term debt extinguishment during the fiscal year ended October 31, 2025. The number of shares issuable upon exercise of the warrants m --- ay not exceed 25.0% of the current number of issued and outstanding shares, nor may it result in the holder owning 19.9% or more of the outstanding shares upon exercise of the warrants. In the event of exercise of warrants that surpasses these thresholds, the excess will be payable in cash on the basis of the difference between the market price of Transat’s shares and the exercise price. Lastly, in the event that the Subordinated debt – LEEFF is repaid in full by its maturity, Transat will have the right to redeem all of the warrants for a consideration equal to their fair market value. The warrants will not be transferable prior to the expiry of the period giving rise to the exercise of such redemption right. In addition, the holder of the warrants will benefit from registration rights to facilitate the sale of the underlying shares and the warrants themselves (once the transfer restriction has been lifted). As at January 31, 2026 and October 31, 2025, a total of 13,000,000 warrants had vested under the drawdowns on the Subordinated debt - LEEFF and no warrants had been exercised. Under the limitations set out above, if the 13,000,000 warrants issued are exercised: • a maximum of 10,092,140 warrants could be exercised through the issuance of shares; • 2,907,860 warrants would be payable in cash on the basis of the difference between the market price of Transat’s shares and the exercise price. Moreover, the parties may, by mutual agreement, exercise the 10,092,140 warrants for a settlement in cash. To the extent that Transat shares are listed on a public market, the Corporation could also choose to settle the exercise of these 10,092,140 warrants on a net share basis, that is, by issuing shares based on the difference between Transat’s share market price and the exercise price of warrants. Transat A.T. Inc. Notes to interim condensed consolidated financial statements 2026, 1ˢᵗ Quarterly Report Transat A.T. Inc. | 34 Due to the existence of settlement mechanisms on a net cash or share basis, the warrants are recorded as derivative financial instruments in the Corporation’s liabilities. The liability related to warrants is remeasured at the end of each period at fair value through profit or loss. It is classified in Level 3 in the fair value hierarchy. The fair value of the liability related to warrants is determined using the Black-Scholes valuation model, which uses significant data not based on observable market data, hence their classification in Level 3. The change in the liability related to warrants is detailed as follows: Quarter ended January 31, 2026 Year ended October 31, 2025 $ $ Opening balance 14,235 8,519 Revaluation of liability related to warrants 4,476 534 Loss on long-term debt extinguishment — 5,182 Closing balance 18,711 14,235 To remeasure the liability related to warrants, classified in Level 3, the Corporation used a Black-Scholes valuation model. As at January 31, 2026, the primary unobservable input used in the model was expected volatility, which was estimated at 55.3%. A 5.0% increase in the expected volatility used in the pricing model would result in a total increase of $867 in the liability related to warrants as at January 31, 2026. Note 10 Provision for return conditions The change in the provision for return conditions is detailed as follows: Quarter ended January 31, 2026 Year ended October 31, 2025 $ $ Opening balance 202,700 174,368 Additional provisions 6,608 24,081 Unused amounts reversed — (8,030) E --- ffect of discount rate changes (8,590) 5,908 Accretion 1,347 5,297 Foreign exchange (gain) loss (6,581) 1,076 Closing balance 195,484 202,700 Current provisions 1,769 1,581 Non-current provisions 193,715 201,119 Closing balance 195,484 202,700 The provision for return conditions relates to contractual obligations to return leased aircraft and engines at the end of the leases under predetermined maintenance conditions. Provisions for return conditions include actual costs of work and estimates of the inflation of those costs and of the forecasted aircraft and engine utilization. The provision for return conditions applies to leases that expire from 2026 to 2036 with an average remaining term of 5.6 years. Transat A.T. Inc. Notes to interim condensed consolidated financial statements 2026, 1ˢᵗ Quarterly Report Transat A.T. Inc. | 35 Note 11 Equity Authorized share capital Class A Variable Voting Shares An unlimited number of participating Class A Variable Voting Shares (“Class A Shares”), which may be owned or controlled only by non-Canadians as defined by the Canada Transportation Act (“CTA”), carry one vote per share at any meeting of the shareholders, subject to an automatic reduction of the voting rights attached thereto in the event that [i] any non-Canadian, individually or in affiliation with another person, holds more than 25% of the votes cast, [ii] any non-Canadian authorized to provide air service in any jurisdiction (in aggregate) holds more than 25% of the votes cast, or [iii] the votes that would be cast by the holders of Class A Shares would be more than 49%. If any of the above-mentioned applicable limitations are exceeded, the votes that should be attributed to holders of Class A Shares will be attributed as follows: • first, if applicable, there will be a decrease of the votes of any non-Canadian individual (including a non-Canadian authorized to provide air service) whose votes total more than 25% of the votes cast, so that such non-Canadian holder never hold more than 25% (or such other percentage as may be prescribed by an act or regulation of Canada and approved or adopted by the directors of the Corporation) of the total votes cast at any meeting; • next, if applicable, and once the pro rata distribution as described above is made, a further pro rata reduction will be made in the voting rights of all non-Canadian holders of Class A Shares authorized to provide an air service, so that such non-Canadian holders may never hold votes totalling more than 25% (or such other percentage as may be prescribed by an act or regulation of Canada and approved or adopted by the directors of the Corporation) of the total votes cast, all classes combined, at a meeting; • last, if applicable, and once the two pro rata allocations described above have been made, a proportional reduction will be made in the voting rights of all holders of Class A Shares, so that all non-Canadian holders of Class A Shares may never hold votes totalling more than 49% (or such other percentage as may be prescribed by an act or regulation of Canada and approved or adopted by the directors of the Corporation) of the total votes cast, all classes combined, at a meeting. Each issued and outstanding Class A Share shall be automatically converted into one Class B Voting Share without any further action on the part of the Corporation or the holder if [i] the Class A Share is or becomes owned or controlled by a Canadian as defined by the CTA; or [ii] the provisio --- ns contained in the CTA relating to foreign ownership restrictions are repealed and not replaced with other similar provisions. Class B Voting Shares An unlimited number of participating Class B Voting Shares [“Class B Shares”], which may only be owned and controlled by Canadians within the meaning of the CTA, and entitling such Canadians to one vote per Class B Share at any meeting of the shareholders of the Corporation. Each issued and outstanding Class B Share shall be converted into one Class A Share, automatically without any further action on the part of the Corporation or the holder if the Class B Share is or becomes owned or controlled by a non-Canadian as defined by the CTA. Preferred shares An unlimited number of preferred shares, non-voting, issuable in series, each series bearing the number of shares, designation, rights, privileges, restrictions and conditions as determined by the Board of Directors. Series 4 Preferred Shares An authorized number of 9,934,617 Series 4 Preferred Shares, non-voting, bearing dividends at the same amount and at the same time as any dividends declared on the Class A Variable Voting Shares and Class B Voting Shares, redeemable at the Corporation’s option at a price per share equal to the higher of $1.64 per share or the fair value of the Class B Voting Shares, redeemable at the holder’s option upon a change of control, and convertible at the option of the holder into Class B Voting Shares as of the date on which the Series 4 Preferred Shares are redeemed for a total amount of $16,265, insofar as the holder shall not hold more than 19.9% of the Class B Voting Shares outstanding as a result of the conversion. Transat A.T. Inc. Notes to interim condensed consolidated financial statements 2026, 1ˢᵗ Quarterly Report Transat A.T. Inc. | 36 Issued and outstanding share capital Voting shares The changes affecting Class A Shares and Class B shares were as follows: Number of shares $ Balance as at October 31, 2024 39,266,191 225,438 Issued from treasury 1,114,050 1,927 Balance as at October 31, 2025 40,380,241 227,365 Issued from treasury 241,890 495 Balance as at January 31, 2026 40,622,131 227,860 As at January 31, 2026, the number of Class A Shares and Class B Shares stood at 2,376,745 and 38,245,386, respectively [2,691,056 and 37,689,185, respectively, as at October 31, 2025]. Preferred shares As the Series 4 Preferred Shares are redeemable at the holder’s option, they are recognized as a derivative financial liability of the Corporation. The Series 4 Preferred Shares are accounted for as a debt host contract at amortized cost with an embedded conversion option recognized at each period-end at fair value through profit or loss and are classified in Level 1 in the fair value hierarchy. As at January 31, 2026, the fair value of the 3,691,591 Series 4 Preferred Shares was estimated to be $9,759 based on a price per share of $2.64, being the five-day volume weighted average price (VWAP) of the Corporation’s Class B Voting Shares and Class A Variable Voting Shares on the Toronto Stock Exchange on that date. The change in the liability related to Series 4 Preferred Shares is detailed as follows: Number of shares Weighted average price ($) $ Balance as at October 31, 2024 — — — Preferred shares issued 9,934,617 2.80 27,778 Preferred shares redeemed (6,243,026) 2.60 (16,265) Reevaluation of liability related to preferred shares (3,565) Balance as at October 31, 2025 3,691,591 2.15 7,948 Revaluation of liabili --- ty related to preferred shares 1,811 Balance as at January 31, 2026 3,691,591 2.64 9,759 Stock option plan Number of options Weighted average price ($) Balance as at October 31, 2025 300,000 3.96 Granted 120,000 2.58 Balance as at January 31, 2026 420,000 3.56 Options exercisable as at January 31, 2026 216,667 4.09 Warrants No warrants were exercised during the quarter ended January 31, 2026. Accordingly, the Corporation did not issue any shares related to the exercise of warrants [Note 9]. Transat A.T. Inc. Notes to interim condensed consolidated financial statements 2026, 1ˢᵗ Quarterly Report Transat A.T. Inc. | 37 Loss per share Basic and diluted loss per share were calculated as follows: Quarters ended January 31 2026 2025 (in thousands of dollars, except per share data) $ $ NUMERATOR Net loss used in computing basic loss per share (29,498) (122,532) Effect of deemed conversion of warrants and preferred shares 6,287 (7) Less anti-dilutive impact (6,287) 7 Net loss used in computing diluted loss per share (29,498) (122,532) DENOMINATOR Adjusted weighted average number of outstanding shares 40,544 39,466 Effect of potential dilutive securities Preferred shares — — Stock options — — Warrants — — Adjusted weighted average number of outstanding shares used in computing diluted loss per share 40,544 39,466 Loss per share Basic (0.73) (3.10) Diluted (0.73) (3.10) For the quarter ended January 31, 2026, the 420,000 outstanding stock options and the 10,092,140 vested warrants that are exercisable through the issuance of shares were excluded from the calculation since their exercise price exceeded the average share price for the period [369,702 stock options and 9,830,037 warrants for the quarter ended January 31, 2025]. For the quarter ended January 31, 2026, the 3,691,591 Series 4 Preferred Shares were also excluded from the calculation due to their anti-dilutive impact. Note 12 Additional disclosure on revenue and expenses Breakdown of revenues from contracts with customers The Corporation has determined that it conducts its activities in a single industry segment, namely holiday travel. With respect to geographic areas, the Corporation operates mainly in the Americas, and serves two main markets that also represent its two main product lines: the transatlantic market and the Americas market, which includes the sun routes. Revenues from contracts with customers is broken down as follows: Quarters ended January 31 2026 2025 $ $ Customers Americas 731,373 702,945 Transatlantic 121,538 120,190 Other 17,802 6,370 Total revenues 870,713 829,505 In accordance with the financial compensation agreement entered into during the fiscal year ended October 31, 2025 with the original equipment manufacturer of the GTF engines, the Corporation recognized an amount of $5,080 for the quarter ended January 31, 2026 [nil for the quarter ended January 31, 2025]. Transat A.T. Inc. Notes to interim condensed consolidated financial statements 2026, 1ˢᵗ Quarterly Report Transat A.T. Inc. | 38 Note 13 Restructuring costs Quarters ended January 31 2026 2025 $ $ Restructuring costs Severance 220 3,078 220 3,078 Restructuring costs include termination benefits related to the changes in organizational structure. The change in the provision for employee termination benefits, which was included in Trade and other payables, was as follows: Quarter ended January 31, 2026 Year ended October 31, 2025 $ $ Opening balance 2,084 1,030 Additional provision 220 5,663 Utilization --- of provision (1,679) (4,609) Closing balance 625 2,084 Note 14 Gain on asset disposals The following table shows the gains on asset disposals for the following periods: Quarters ended January 31 2026 2025 $ $ Gain on asset disposals Gain on sale and leaseback of assets [Note 7] — (5,183) — (5,183) Transat A.T. Inc. Notes to interim condensed consolidated financial statements 2026, 1ˢᵗ Quarterly Report Transat A.T. Inc. | 39 Note 15 Commitments and contingencies Leases and other commitments As at January 31, 2026, the Corporation was party to agreements to lease four Airbus A321XLRs to be delivered in 2027 and 2028. The Corporation also has leases with a term of less than 12 months and/or for low-value assets, as well as purchase obligations under various contracts with suppliers, particularly in connection with information technology service contracts, undertaken in the normal course of business. The following table sets out the minimum payments due under leases of aircraft to be delivered over the next few years and under leases with a term of less than 12 months and/or for low-value assets, as well as purchase obligations: Year ending October 31 2026 2027 2028 2029 2030 2031 and up Total $ $ $ $ $ $ $ Leases (aircraft and other) — 10,964 37,634 37,634 37,634 327,739 451,605 Purchase obligations 22,543 19,105 8,536 5,104 3,228 2,672 61,188 22,543 30,069 46,170 42,738 40,862 330,411 512,793 Litigation In the normal course of business, the Corporation is exposed to various claims and legal proceedings. There are often many uncertainties surrounding these disputes and the outcome of the individual cases is unpredictable. According to management, these claims and proceedings are adequately provided for or covered by insurance policies and their settlement should not have a significant negative impact on the Corporation’s financial position, subject to the paragraph hereunder. The Corporation has directors’ and officers’ liability insurance and professional liability insurance, with coverage under said insurance policies that is usually sufficient to pay amounts that the Corporation may be required to disburse in connection with these lawsuits that are specific to the directors and officers, and not the Corporation. In addition, the Corporation holds professional liability and general liability insurance for lawsuits relating to non-bodily or bodily injuries sustained. In all these lawsuits, the Corporation has always defended itself vigorously and intends to continue to do so. As a result of the COVID-19 pandemic, the Corporation has been the subject of a number of applications for authorization to institute class actions in connection with the reimbursement of customer deposits for airline tickets and packages that had to be cancelled. While some of these class actions have not yet been definitively settled, the Corporation has refunded almost all of the customers, particularly since April 2021, using the unsecured credit facility related to travel credits. Consequently, applications for authorization to institute class actions that have not yet been settled may become moot. In any event, the Corporation will continue to defend itself vigorously in this respect. If the Corporation had to pay an amount related to class actions, the unfavourable effect of the settlement would be recognized in the consolidated statement of income (loss) and could have an unfavourable effect on cash. Other From time to time, the Corporation is subject to audi --- ts by tax authorities that give rise to questions regarding the tax treatment of certain transactions. Certain of these matters could entail significant costs that will remain uncertain until one or more events occur or fail to occur. Although the outcome of such matters is difficult to predict with certainty, the tax claims and risks for which there is a probable unfavourable outcome are recognized by the Corporation using the best possible estimates of the amount of the loss. Transat A.T. Inc. Notes to interim condensed consolidated financial statements 2026, 1ˢᵗ Quarterly Report Transat A.T. Inc. | 40 Note 16 Guarantees In the normal course of business, the Corporation has entered into agreements containing clauses meeting the definition of a guarantee. These agreements provide compensation and guarantees to counterparties in transactions such as operating leases, irrevocable letters of credit and collateral security contracts. These agreements may require the Corporation to compensate the counterparties for costs and losses incurred as a result of various events, including breaches of prior representations or warranties, loss of or damages to property, claims that may arise while providing services and environmental liabilities. Notes 4, 12, 15 and 22 to the consolidated financial statements for the year ended October 31, 2025 provide information about some of these agreements. The following constitutes additional disclosure. Leases The Corporation’s subsidiaries have general indemnity clauses in many of their airport and other real estate leases whereby they, as lessee, indemnify the lessor against liabilities related to the use of the leased property. The nature of the agreements varies based on the contracts and therefore prevents the Corporation from estimating the total potential amount its subsidiaries would have to pay to lessors. Historically, the Corporation’s subsidiaries have not made any significant payments under such agreements and have liability insurance coverage in such circumstances. Collateral security contracts The Corporation has entered into collateral security contracts with certain suppliers. Under these contracts, the Corporation guarantees the payment of certain services rendered that it undertook to pay. These contracts typically cover a one-year period and are renewable. The Corporation has entered into collateral security contracts whereby it guarantees a prescribed amount to its customers, as required by regulatory agencies, for the performance of the obligations included in mandates of its customers during the term of the licences granted to the Corporation for its travel agent and wholesaler operations in the Province of Quebec. These agreements typically cover a one-year period and are renewable annually. As at January 31, 2026, the total amount of these guarantees unsecured by deposits totalled $3,493. Historically, the Corporation has not made any significant payments under such agreements. As at January 31, 2026, no amounts had been accrued with respect to the above-mentioned agreements. Note 17 Segment disclosures The Corporation has determined that it conducts its activities in a single industry segment, namely holiday travel. With respect to geographic areas, the Corporation’s operations are primarily in the Americas. Revenues and non-current assets outside the Americas are not material. Therefore, the consolidated statements of loss and consolidated statements of financial position include all --- the required information. Transat A.T. Inc. Notes to interim condensed consolidated financial statements 2026, 1ˢᵗ Quarterly Report Transat A.T. Inc. | 41