Transat A.T. Inc.

Q3 revenue increased 3%, or $26 million, to $793 million. Adjusted EBITDA was negative $1 million versus positive $81 million in Q3 2025. Fuel costs before the LASER contribution were up $105 million year over year; reported fuel expense was $238 million, up $79 million or 50%, and the fuel price increased 56% to US$3.74 per gallon from $2.40. Net loss was $107 million versus net income of $400 million last year, and adjusted net loss was $89 million, or $2.18 per share, versus $12 million, or $0.28 per share. Free cash flow was negative $32 million in the quarter and positive $4 million for the first nine months. Cash and cash equivalents were $243 million at July 31, 2026, customer deposits were $847 million, and long-term debt plus deferred government grant was $448 million. For Q4, management said load factor is 0.6 percentage points ahead of last year, yield is broadly in line, and capacity is up 2% year over year in ASM terms; for winter, capacity will not increase.

Annick Guerard said the quarter showed resilient demand even as profitability was pressured by fuel and competition. She emphasized disciplined capacity management, selective growth in markets where Transat has an advantage, and strategic initiatives aimed at improving the revenue mix over time. She highlighted the new loyalty program, cabin reconfiguration plan, and partnerships as core to broadening revenue sources and reducing seasonality.

Jean-Francois Pruneau said the earnings decline was driven mainly by fuel, with costs up $105 million year over year before the LASER contribution and fuel expense rising to $238 million. He noted additional pressure from salaries, pilot contract costs, and engine-related disruptions, and said the GTF issue is not expected to be fully resolved before 2028. He also detailed liquidity moves: the $150 million LASER facility is fully drawn, interest is 3.91%, and the additional $250 million government-backed loan matures in 2035 with 1.22% interest for the first three years and 3% thereafter.

Analysts pressed management on weak yield versus peers, particularly given industry pricing trends. Guerard said Transat’s economy-heavy mix and exposure to intense promotional activity limited its ability to pass through fuel costs, while legacy carriers benefit from premium, corporate, and loyalty revenue streams Transat is still building. Questions also focused on liquidity and whether the new government facilities are enough; Pruneau said that based on the forward fuel curve, Transat expects to be okay, though he acknowledged the situation remains volatile. Analysts also asked about capacity and premium cabin plans, and management said Q4 capacity is below 2% in seats with no winter increase planned, while the new cabin program will be rolled out first in key European markets.