Implementation of a Comprehensive Optimization Plan to Accelerate Corporate Strategy Execution

Third-quarter highlights:

• Revenues of $736.2 million, down 1.4% from $746.3 million last year
• Adjusted EBITDA¹ of $41.3 million, compared to $114.8 million last year
• Net loss of $39.9 million ($1.03 per share), versus net income of $57.3 million ($1.49 per share) last year
• Negative free cash flow¹ of $168.7 million, compared to $52.1 million last year
• Customer deposits for future travel of $825.8 million, up 1% from July 31, 2023
• Named the World’s Best Leisure Airline for the sixth time at the 2024 Skytrax World Airline Awards

MONTREAL, Sept. 12, 2024 /CNW/ – Transat A.T. Inc., a leisure travel reference worldwide, operating as an air carrier under the Air Transat brand, announced today its results for the third quarter ended July 31, 2024.

“Transat’s third-quarter results reflect evolving market conditions and industry-wide pressure as recently indicated by other carriers. Demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty. Capacity increases throughout the industry also added to competitive pressure and negatively impacted yields,” said Annick Guérard, President and Chief Executive Officer of Transat.

“We have launched a comprehensive plan, referred to as our Elevation Program, which is designed to accelerate our corporate strategy execution and drive long-term profitable growth. The program, initiated this summer, aims for a complete review of operations and business practices. Its objective is to accelerate the implementation of enhanced tools and processes for our teams, in order to optimize overall execution and efficiency. The program will be spearheaded by the newly created Elevation Management Office, which will strengthen governance and accountability for the initiatives undertaken. Our target is to achieve a $100 million improvement in annual adjusted EBITDA¹ over the next 18 months,” added Ms. Guérard.

“Profitability remains affected by costs related to capacity deployment and by the Pratt & Whitney GTF² engine issue. We have agreed to a financial compensation from Pratt & Whitney relating to operational disruptions during the 2023-2024 period. Such financial compensation, which is mostly in the form of credits, will be applied to the purchase of additional spare engines, which we intend to monetize through a sale and leaseback transaction. Looking ahead, we are confident that the initiatives from our Elevation Program will gradually place us on the path to sustaining an improved financial performance. Nevertheless, it remains our top priority to complete a refinancing plan and strengthen our balance sheet. To that end, we are continuing our discussions with stakeholders and are reviewing a number of alternatives,” added Jean-François Pruneau, Chief Financial Officer of Transat. ²Geared turbofan (“GTF”).

Third-quarter results

For the three-month period ended July 31, 2024, revenues reached $736.2 million, down 1.4% from $746.3 million in the corresponding period a year ago. The decrease in revenues is attributable to lower airline unit revenues (yield), which were down 9.7% compared with 2023, partially offset by a 2.8% increase in traffic expressed in revenue-passenger-miles (RPM). The intensified competition, industry wide overcapacity, inefficiencies resulting from the Pratt & Whitney GTF² engine issue affecting revenue management and the economic uncertainty put downward pressure on airline unit revenues. Company-wide capacity was up 5.6% from last year.

Adjusted EBITDA stood at $41.3 million, compared with $114.8 million a year ago. In addition to lower yields, the variation is mainly due to higher operating expenses associated with capacity expansion,  expenses caused by the Pratt & Whitney GTF² engine issue, and by higher fuel expenses reflecting a 6% increase in fuel prices compared with the corresponding period in 2023.

Nine-month results

For the nine-month period ended July 31, 2024, revenues reached $2,494.9 million, up 9.2% from $2,283.9 million in the corresponding period a year ago. For the nine-month period, across the entire network, offered capacity  increased by 12.9% compared with 2023. Overall, traffic was 10.0% higher than for the corresponding period in 2023. Revenue growth was impacted by the same factors provided for the three-month period, along with strike threats during the winter season.

For the nine-month period, adjusted EBITDAs tood at $70.3 million, compared with $174.3 million a year ago. The decline is mainly attributable to the same factors provided for the three-month period.

Cash flow and financial position

Cash flow used in operating activities amounted to $91.1 million during the third quarter of 2024, compared with $7.5 million for the same period last year, due to lower liquidity generated by net change in non-cash working capital balances as well as other assets and liabilities and to a decrease in operating income this year. These factors were partially offset by an increase in the net change in the provision for return conditions. After accounting for investing activities and repayment of lease liabilities, negative free cash flow¹ reached $168.7 million during the quarter, versus $52.1 million a year earlier.

As at July 31, 2024, cash and cash equivalents amounted to $361.9 million, compared to $570.6 million at the same date in 2023 and $435.6 million as at October 31, 2023. Cash and cash equivalents in trust or otherwise reserved mainly resulting from travel package bookings increased year-over-year reaching $274.7 million as at July 31, 2024, compared with $263.6 million at the same date in 2023.

During the nine-month period ended July 31, 2024, the Corporation early repaid its subordinated credit facility for its operations that was due to mature on April 29, 2025. The repayment totalled $46.0 million. The Corporation also reduced its LEEFF secured facility by repaying an amount of $11.0 million. Following these repayments, long-term debt and deferred government grant, net of cash, amounted to $430.0 million as at July 31, 2024, up from $380.1 million as at October 31, 2023.

Key indicators

To date, load factors for the fourth quarter are slightly higher compared to the same date in fiscal 2023, while airline unit revenues, expressed as yield, are 9.7% lower than they were at this time last year.

For fiscal 2024, the capacity increase now stands at 9.9%, a decrease of 1.1% since the second quarter.

About Transat

Founded in Montreal 36 years ago, Transat has achieved worldwide recognition as a provider of leisure travel particularly as an airline under the Air Transat brand. Voted World’s Best Leisure Airline by passengers at the 2024 Skytrax World Airline Awards, it flies to international destinations. By renewing its fleet with the most energy-efficient aircraft in their category, it is committed to a healthier environment, knowing that this is essential to its operations and the destinations it serves. (TSX: TRZ) www.transat.com

More families with toddlers and pre-school-age children are visiting Punta Cana this year, while older kids are hitting historic European cities with mom and dad

MONTREAL, June 27, 2024 /CNW/ – When it comes to travelling with children, Canadians know that their destination of choice will make the journey all the more enjoyable. This summer, for parents of toddlers, it means parking at a resort town in the Caribbean, while families with teens prefer experiencing the historic sight-seeing options of Europe.

Family travel: Punta Cana for the little ones, Rome for the teens

According to travel data from Air Transat, voted World’s Best Leisure Airline for the sixth time at the 2024 Skytrax World Airline Awards, Punta Cana in the Dominican Republic, and Rome in Italy are the most popular booking choices for family vacations during the peak summer season (June to August) in 2024.

For those with kids under 5, Punta Cana is the summer destination experiencing the biggest increase in bookings. But for adults travelling with older grade-schoolers or teenagers, their destination of choice is increasingly Rome.

“It is clear that in the early years of parenthood, adults want to travel where they know they can relax, recoup their energy, and set up shop next to a pool or on a beach,” said Xavier Szwengler, Vice President, Marketing & Loyalty at Transat. “But once the kids grow out of strollers, more parents are prioritizing educational destinations that can broaden horizons, particularly Rome, where family vacation itineraries are never short on activities and discoveries. No matter where their adventures take them, families can trust Air Transat to provide exceptional care and service, ensuring they travel with peace of mind.”

Families are very important to Air Transat. The airline offers a range of family privileges to ensure a comfortable and enjoyable journey. These include free seat selection for families so they can sit together, as well as priority check-in and boarding. Additionally, Air Transat provides a Kids Club with various benefits for children aged 2 to 11, such as on-board surprises and priority baggage handling. With these dedicated services, Air Transat makes travelling with children easier and more enjoyable, allowing families to focus on creating unforgettable memories together.

Tailored travel experience for every generation

Other Air Transat data revealed that Rome, Paris, London and Lisbon are the most popular destinations among all adult age groups this summer, though travellers 55+ heading to Portugal tend to choose Porto over Lisbon. Porto, the coastal city in the northwest of Portugal, is also surprisingly the most popular destination for travellers with a pet, as many of the activities in the region are pet friendly.

In addition to popular destinations, the latest data from Air Transat shared some interesting statistics around how different generations travel. Millennials are the most likely to do short weekend vacations, with Cancun and Punta Cana topping the list, while Gen X and Boomers prefer vacations longer than two weeks in European destinations such as Paris, Rome, Athens, Porto and Lisbon.

Millennials are also the ones who travel with the most baggage, while Boomers and Gen X prefer to book their seats in advance for peace of mind. These travellers can benefit from Option Plus for more privileges and services in economy class, such as one checked bag included, seat selection and priority services at the airport.

Solo trips: Paris and London lead the way

For travellers looking to embark on a solo trip this summer, Paris, London, Rome and Lisbon are topping the list. In fact, Paris has seen a 48 per cent increase in bookings this year, while London has seen a 39 per cent increase. For those travelling as a pair, they are favouring similar destinations, although Rome has seen a 56 per cent increase in bookings and Paris a 50 per cent one.

One thing is for sure, there is a strong appetite for travel compared to pre-pandemic years. Air Transat has a robust flight program from Montreal, Toronto and Quebec City this summer, offering more than 280 weekly non-stop flights to more than 40 destinations, including newly added flights to Lima (Peru) and Marrakech (Morocco) offered year-round.

About Air Transat
Founded in Montreal 36 years ago, Air Transat is a leading travel brand voted 2024 World’s Best Leisure Airline by passengers at the Skytrax World Airline Awards. Its program offers access to international destinations, mainly in Europe, the Caribbean, the East and West coasts of the U.S, South America and North Africa. Air Transat is recognized for its excellent customer service. By renewing its fleet with the most energy-efficient aircraft in their category, Air Transat is committed to a more sustainable travel industry. Based in Montreal with major hubs in YUL Montréal-Trudeau International Airport and Toronto Pearson Airport (YYZ), it has near 5,000 employees with a common purpose to bring people closer together. Air Transat is a business unit of Transat A.T. Inc. (TSX: TRZ). www.airtransat.com

Methodology
The data presented was sourced internally by Air Transat through proprietary systems which are designed to capture accurate and timely information related to travel bookings. The data collection period spans from November 2018 to May 2024, with a focus on bookings for June – August 2024.

The airline tops the ranking for the sixth time

MONTREAL, June 25, 2024 /CNW/ – Air Transat is pleased to announce that it has been named the World’s Best Leisure Airline for the sixth time at the Skytrax World Airline Awards.

The awards ceremony was held yesterday, June 24, at the iconic Fairmont Windsor Park in England. Miguel Teixeira, Vice President, In-Flight Services & Customer Experience of Air Transat, alongside members of the Air Transat flight crew, were present to accept this prestigious award.

“To be recognized again with this award is incredibly gratifying,” said Miguel Teixeira. “It reflects our commitment to providing our passengers with an outstanding travel experience and it speaks to the amazing enhancements we have recently made to our inflight product and service levels. Our team’s tireless efforts to make customer satisfaction a priority ensure that we consistently meet and exceed the expectations of those who choose to fly with us.”

Annick Guérard, President and Chief Executive Officer of Transat, mentioned: “I am deeply grateful to our employees for their remarkable professionalism and dedication. Their contributions are at the heart of this significant achievement and winning this award for the sixth time underscores the extraordinary efforts of our team and their essential role in our continued success.”

“The success of Air Transat in winning this top accolade showcases the airlines top level service and travel experience for their customers,” added Edward Plaisted, Chief Executive Officer of Skytrax. “The achievement of winning this award for the sixth time solidifies their position as a market leader in the leisure airline industry and is a factor that Air Transat management and staff should be extremely proud of.”

The World’s Best Leisure Airline Award represents passenger satisfaction of the product and staff service standards that leisure airlines provide to customers onboard flights and at the airport.

Air Transat won this award in 2012, 2018, 2019, 2021, 2023 and now 2024, in addition to being voted North America’s Best Leisure Airline in 2022.

About the World Airline Awards

The World Airline Awards are wholly independent and impartial, introduced in 1999 to provide a customer satisfaction study that was truly global. Travellers across the world vote in the largest airline passenger satisfaction survey to determine the award winners. The awards are referred to by media around the world as “the Oscars of the aviation industry”.

All costs of the Survey and Awards event are paid by Skytrax, and airlines do not pay any entry or registration fee. There are no charges for use of the Award logos and results.

The online customer survey operated from September 2023 to May 2024, together with invitations sent to previous year respondents in the survey database. The customer survey was provided in English, French, Spanish, Russian, Japanese and Chinese.

Over 100 customer nationalities participated in the 2023/2024 survey with 21.42 million eligible entries counted in the results. Survey entries are screened to identify IP and user information, with all duplicate, suspect or ineligible entries deleted. More than 350 airlines are featured in the final Award results.

About Air Transat

Founded in Montreal 36 years ago, Air Transat is a leading travel brand voted 2024 World’s Best Leisure Airline by passengers at the Skytrax World Airline Awards. Its program offers access to international destinations, mainly in Europe, the Caribbean, the East and West coasts of the U.S, South America and North Africa. Air Transat is recognized for its excellent customer service. By renewing its fleet with the most energy-efficient aircraft in their category, Air Transat is committed to a more sustainable travel industry. Based in Montreal with major hubs in YUL Montréal-Trudeau International Airport and Toronto Pearson Airport (YYZ), it has near 5,000 employees with a common purpose to bring people closer together. Air Transat is a business unit of Transat A.T. Inc.  www.airtransat.com

Innovative aerial reforestation of Eeyou Istchee territory in Northern Quebec

MONTREAL, June 18, 2024 /CNW/ – Transat is pleased to announce its support to Flash Forest, a Canadian aerial reforestation company whose mission is to rebuild healthy resilient forests at scale through a data-driven, biodiversity-centric, and community-led approach.

Canada’s once-forested areas are now in great need of replanting, in the interests of the local communities, the boreal forest ecosystem, and the fight against climate change at large. Through this partnership with Transat, Flash Forest will plant an additional 29 hectares of forest over the next days in Assinica National Park, renowned for its verdant boreal forest. By 2025, Transat will have helped finance the replanting of a forest devastated by wildfires, with over 70,000 trees or 48 hectares. This will allow for the sequestration of nearly 29,411 tonnes of CO2 over the course of the trees’ lifetime.

 “We started discussing with Flash Forest last summer during the wildfire season. We were looking for a way to have a tangible long-lasting impact in our homeland through community investment, in line with our values and our approach to corporate responsibility. Flash Forest became an obvious choice for its unique and community-led approach. Almost a year later, it remains just as relevant and critical to restore the vital ecosystems that have been destroyed, further validating the need for organizations like Flash Forest. This initiative is only a small step in our journey toward a more environmentally responsible and sustainable future, and we hope to shed light on the important work Flash Forest is doing through this initiative,” said Julie Lamontagne, Chief People, Corporate Responsibility and Communications at Transat.

Flash Forest’s innovative approach to reforestation leverages drone technology, enabling greater precision and access to post-wildfire areas deemed unsafe or inaccessible for humans, combined with proprietary seedpods designed to maximize the success rate of plantation. Planting more than 10 times faster than humans, Flash Forest’s seedpod technology is also more sustainable than traditional tree planting methods, omitting the energy-intensive nursery phase. They are on a journey to plant one billion trees, and not stop there.

“As we embark on this exciting new partnership between Flash Forest and Transat, we are taking on the skies. By combining the latest aerial reforestation tech at Flash Forest with the global reach of Transat, we are restoring post-wildfire ecosystems at scale while bringing awareness to the localized effects that wildfires can have on small communities in our own backyard. Transat’s tree planting partnership with Flash Forest demonstrates their commitment to sustainability and community involvement, while bolstering the Canadian clean tech space. We are proud to be working with such a passionate team,” said Bryce Jones, CEO of Flash Forest.

Collaborating with Indigenous communities to drive greater impact

Communities like the Cree Nation of Oujé-Bougoumou in Eeyou Istchee, located about 20 kilometres north of Assinica National Park, are affected firsthand by wildfires. The Cree community of Oujé-Bougoumou was actively involved in the creation of the park in 2011, and practises traditional activities within its boundaries. The park is managed by the Cree Nation of Oujé-Bougoumou. To further drive sustainable impact, Flash Forest offers employment opportunities to the Indigenous communities they partner with, recognizing their expertise and contributions in environmental conservation and management.

By involving them in seed collection and reforestation plan development, Flash Forest can ensure that the right species are planted in the right places, leading to healthier and more resilient ecosystems. Hyperlocal seed collection is crucial for environmental restoration projects. First and foremost, it promotes ecological diversity by ensuring that native plant species are used in reforestation efforts. Indigenous communities have intimate knowledge of the local flora, including which species are best suited for particular environments.

About Transat  

Founded in Montreal 36 years ago, Transat has achieved worldwide recognition as a provider of leisure travel, particularly as an airline under the Air Transat brand. Voted World’s Best Leisure Airline by passengers at the 2023 Skytrax World Airline Awards, it flies to international destinations. By renewing its fleet with the most energy-efficient aircraft in their category, it is committed to a healthier environment, knowing that this is essential to its operations and the destinations it serves. Transat has been Travelife-certified since 2018. www.transat.com 

The airline inaugurated yesterday its exclusive non-stop flights between Montreal and Marrakech

MONTREAL, June 13, 2024 /CNW/ – Air Transat, voted the World’s Best Leisure Airline at the 2023 Skytrax World Airline Awards, proudly operated its first flight connecting YUL Montréal-Trudeau International Airport to Marrakech-Menara International Airport (TS396) last night. This exclusive non-stop service, the only one between Canada and Marrakech, will operate year-round: twice weekly during the summer (until October) and once weekly during the winter (from November to April).

“We are extremely proud to introduce this new route between Montreal and Marrakech, an initiative that not only enhances our destination offerings but also strengthens our mission of bringing people closer together. This direct route will allow the Moroccan diaspora to reunite more easily with their loved ones while offering Canadian travellers a unique opportunity to discover the cultural and historical wonders of Morocco. This is a major milestone in our history, demonstrating our commitment to creating memorable and meaningful travel experiences,” said Joseph Adamo, Chief Sales and Marketing Officer of Transat.

This service is complemented by packages, guided tours, and à la carte hotels to meet all the needs of travel enthusiasts. 

“ADM Aéroports de Montréal is delighted to welcome this first direct service to Marrakech offered by our partner Air Transat, which will allow travellers to discover a destination rich in history and culture. And we’re even prouder to be the first airport in North America to offer non-stop service to this must-see French-speaking city,” said Karl Brochu, Vice President, Airport Operation and Air Services Development at Aéroports de Montréal. “This year-round service will benefit not only Montréal’s large Moroccan community but also all travellers looking for unforgettable memories. We would like to thank all the Air Transat teams who have worked tirelessly to develop this route, which once again confirms YUL’s status as a major hub for international air travel.” 

These flights will be operated, notably, with its new-generation Airbus A321LR aircraft, featuring spacious cabins, state-of-the-art in-seat entertainment systems, and the lowest fuel consumption and greenhouse gas emissions (CO2 and NOx) in their category.  

Travellers flying with Air Transat benefit from over 35 years of experience and award-winning expertise, having been named the World’s Best Leisure Airline by Skytrax five times. On board, they enjoy a warm service, whether in Economy Class or Club Class, with fare options to suit all needs. Additionally, Air Transat is known for its reliability and frequent on-time departures, ensuring a pleasant and worry-free travel experience.

About Air Transat

Founded in Montreal 36 years ago, Air Transat is a leading travel brand voted World’s Best Leisure Airline by passengers at the 2023 Skytrax World Airline Awards. Its program offers access to international destinations, mainly in Europe, the Caribbean, the East and West coasts of the U.S, South America and North Africa. Air Transat is recognized for its excellent customer service. By renewing its fleet with the most energy-efficient aircraft in their category, Air Transat is committed to a more sustainable travel industry. Based in Montreal with major hubs in YUL Montréal-Trudeau International Airport and Toronto Pearson Airport (YYZ), it has near 5,000 employees with a common purpose to bring people closer together. Air Transat is a business unit of Transat A.T. Inc. (TSX: TRZ). www.airtransat.com  

Recent distinctions and awards 

• Named World’s Best Leisure Airline for the fifth time at the 2023 Skytrax World Airline Awards
• Among Canada’s Best Employers and Best Employers for Diversity according to Forbes’s ranking

Voted the world’s best leisure airline, Air Transat begins non-stop flight from Montréal to Marrakech this June.

MONTRÉAL, June 11, 2024 /CNW/ – UPPL, a trusted leader in brand strategy, insights, content production, and advertising, has joined forces with Air Transat, to create and produce the latest installment of their ongoing video series, “Pourquoi Voyager.” This collaboration marks an exciting time as Air Transat inaugurates its newest route, Montréal-Marrakech, with flights starting June 2024.

The service comes at a pivotal time in Moroccan tourism, as the country aims to attract 17 million tourists by 2026 (source: UPPL Insights). Additionally, a significant $245 million CAD investment has been made to expand the capacity of Marrakech’s Menara airport. This expansion will double the airport’s current capacity, reaching a total of 11.5 million passengers annually.

Known for its strategic insights and creative approach, UPPL brings its market understanding, production expertise, and execution chops to the collaboration, ensuring the “Pourquoi Voyager” campaign resonates with the Québécois and Moroccan community in Montréal, and Canada’s growing transcultural customer segment.

The video, featured in Transat’s in-flight entertainment and digital channels, explores the transformative power of travel. It was produced on location by UPPL Morocco and features Tamy Emma Pepin, UPPL’s President and Managing Director.

“Morocco is growing at a 3.5% annual rate, it is flourishing across sectors. UPPL is proud to be established in this market, to facilitate the projects of clients and contribute to the sustainable growth of the country. We also continue to serve key sectors and industries in Canada and Québec”, she says.

The episode’s narrative highlights the themes of connection and diversity in Marrakesh, which are of significant importance to Pepin, a French-Canadian executive with Moroccan roots.  

The content celebrates the southern city as a vibrant tapestry, harmoniously blending tradition and modernity with history, geography, culture, ecology, architecture, technology and art; making it a fascinating place to discover time and again. 

“Travel has the power to connect us to ourselves and to each other in new and meaningful ways. I’m proud of the creative teams at UPPL. I see this as the beginning of larger key trends impacting our economies and our globalized world,” remarks Tamy Emma Pepin, President and Managing Director of UPPL.

About UPPL:

Founded in 2016, UPPL is a dynamic agency specializing in marketing and communication services. Established in Québec, with branches in Montréal and Marrakech, UPPL’s mission is to promote purpose-driven organizations, brands and businesses, creating positive impact in their communities and markets. 

Recognized for their strategic thinking and content marketing expertise, UPPL consistently delivers value from initial account services through creative development, strategic partnerships, media distribution and immersive experiences.

In 2024, UPPL reached a new milestone by launching in Morocco, enhancing its strategic insights into European and African markets, and bridging the North and Global South in an ever-evolving marketplace.

Sustained Demand in a More Challenging Environment

Second-quarter highlights:

• Revenues of $973.2 million, up 11.8% from $870.1 million last year
• Adjusted EBITDA of $37.6 million, compared to $56.1 million last year
• Net loss of $54.4 million ($1.40 per share), versus $29.2 million ($0.76 per share) last year
• Positive free cash flow of $109.8 million, compared to $154.2 million last year
• Early repayment of $36.3 million subordinated debt which was due on April 29, 2025
• Customer deposits for future travel of $896.9 million, up 3% from April 30, 2023

MONTREAL, June 6, 2024 /CNW/ – Transat A.T. Inc., a leisure travel reference worldwide, operating as an air carrier under the Air Transat brand, announced today its results for the second quarter ended April 30, 2024.

“Transat delivered double-digit revenue growth for a second consecutive quarter on the strength of increased customer traffic. On the profitability side, adjusted EBITDA declined to $38 million in the second quarter due to well-documented industry-wide and company-specific issues,” said Annick Guérard, President and Chief Executive Officer of Transat.

“We are fully prepared from an operational standpoint for the summer season. As such, we recently completed the process of bringing in-house passenger and ramp services at Montreal-Trudeau International Airport to enhance the customer journey. Additionally, with the launch of phase one of our commercial joint venture with Porter announced yesterday, we will benefit from additional leverage to optimize our partnership. Finally, in the coming weeks, we will complete the reception of seven aircraft, including four A321LRs that represent the cornerstone of Transat’s fleet and growth strategy,” added Ms. Guérard.

“We diligently continued to deleverage our balance sheet in the second quarter, reimbursing subordinated debt of $36 million and raising total loan repayments to approximately $110 million in the last three quarters. We also extended the maturity of the secured debt from April 2025 to February 2026 to provide Transat with added flexibility to secure a refinancing agreement,” added Jean-François Pruneau, Chief Financial Officer of Transat.

Second-quarter results 

For the three-month period ended April 30, 2024, revenues reached $973.2 million, up 11.8% from $870.1 million in the corresponding period a year ago. The increase reflects sustained demand for leisure travel driven by a 12% increase in traffic expressed in revenue-passenger-miles (RPM). However, this increase was reined in by intensified competition, inefficiencies resulting from Pratt & Whitney GTF² engine issue affecting revenue management, consequences of union strike threats, and the economic slowdown, which put downward pressure on airline unit revenues (yield), resulting in a 7.5% decline. Company-wide capacity was up 13% from last year.

Adjusted EBITDA¹ stood at $37.6 million, compared with $56.1 million a year ago. In addition to lower yields, the variation is mainly due to higher operating expenses associated with capacity expansion and expenses caused by the Pratt & Whitney GTF² engine issue, including additional temporary aircraft leasing during the quarter to replace grounded aircraft. These factors were partially offset by lower fuel expenses reflecting a price decline of 11% compared to last year.

Six-month results

For the six-month period ended April 30, 2024, revenues reached $1,758.7 million, up 14.4% from $1,537.6 million in the corresponding period a year ago. For the six-month period, across the entire network, the capacity offered increased by 19% compared with 2023, while the capacity for south destinations, the main program during this period, increased by 20%. Overall, traffic was 16% higher than for the corresponding period of 2023.

For the six-month period, adjusted EBITDA¹ stood at $29.0 million, compared with $59.5 million a year ago. The decline is mainly explained by the same factors provided for the three-month period.

Cash flow and financial position

Cash flow from operating activities amounted to $183.2 million during the second quarter of 2024, compared with $190.6 million for the same period last year, due to a decrease in operating income this year and to a decrease in the net change in the provision for return conditions, partially offset by higher liquidity generated by net change in non-cash working capital balances as well as other assets and liabilities. After accounting for investing activities and repayment of lease liabilities, free cash flow¹ reached $109.8 million during the quarter, versus $154.2 million a year earlier.

As at April 30, 2024, cash and cash equivalents amounted to $528.9 million, compared to $623.6 million at the same date in 2023 and $435.6 million as at October 31, 2023. Cash and cash equivalents in trust or otherwise reserved mainly resulting from travel package bookings remained relatively stable year-over-year reaching $263.6 million as at April 30, 2024, compared with $262.2 million at the same date in 2023.

Reflecting sound demand, customer deposits for future travel stood at $896.9 million as at April 30, 2024, up 3% from April 30, 2023.

During the quarter, the Corporation renegotiated its LEEFF secured credit facility with a principal amount of $41.4 million, as well as its revolving credit facility of $50.0 million, extending their maturity from April 2025 to February 2026. During the six-month period ended April 30, 2024, the Corporation early repaid its subordinated credit facility for its operations that was due to mature on April 29, 2025. The repayment totaled $46.0 million. Following this repayment, long-term debt and deferred government grant, net of cash, amounted to $252.1 million as at April 30, 2024, down from $380.1 million as at October 31, 2023.

Highlights and non-IFRS financial measures

	Second quarter		First six-month period
	2024	2023	2024	2023
(in thousands of Canadian dollars, except per share amounts)	$	$	$	$
Operating income (loss)	(15,161)	18,740	(67,590)	(19,363)
Depreciation and amortization	54,748	42,763	104,912	83,871
Reversal of impairment of the investment in a joint venture	—	—	(3,112)	—
Restructuring costs (reversal)	1,911	(557)	1,977	2,343
Premiums related to derivatives that matured during     the period	(3,863)	(4,802)	(7,177)	(7,376)
Adjusted operating income (loss)	37,635	56,144	29,010	59,475
Net loss	(54,387)	(29,180)	(115,364)	(85,790)
Reversal of impairment of the investment in a joint venture	—	—	(3,112)	—
Restructuring costs (reversal)	1,911	(557)	1,977	2,343
Change in fair value of derivatives	(4,978)	13,949	17,181	23,870
Revaluation of liability related to warrants	(6,236)	(3,234)	5,511	6,905
Foreign exchange (gain) loss	28,170	15,867	(13,957)	(6,962)
Gain on disposal of an investment	—	—	(5,784)	—
Gain on asset disposals	—	—	—	(2,511)
Premiums related to derivatives that matured during     the period	(3,863)	(4,802)	(7,177)	(7,376)
Adjusted net loss	(39,383)	(7,957)	(120,725)	(69,521)
Adjusted net loss	(39,383)	(7,957)	(120,725)	(69,521)
Adjusted weighted average number of outstanding shares used     in computing diluted earnings per share	38,713	38,222	38,645	38,153
Adjusted net loss per share	(1.02)	(0.21)	(3.12)	(1.82)

Cash flows related to operating activities	183,216	190,559	293,918	385,647
Cash flows related to investing activities	(31,247)	(7,279)	(59,992)	(17,760)
Repayment of lease liabilities	(42,184)	(29,083)	(85,048)	(69,540)
Free cash flow	109,785	154,197	148,878	298,347

			As at April 30, 2024	As at October 31, 2023
(in thousands of dollars)			$	$
Long-term debt			646,814	669,145
Deferred government grant			134,182	146,634
Liability related to warrants			26,327	20,816
Lease liabilities			1,136,161	1,221,451
Total debt			1,943,484	2,058,046
Total debt			1,943,484	2,058,046
Cash and cash equivalents			(528,886)	(435,647)
Total net debt			1,414,598	1,622,399

About Transat

Founded in Montreal 36 years ago, Transat has achieved worldwide recognition as a provider of leisure travel particularly as an airline under the Air Transat brand. Voted World’s Best Leisure Airline by passengers at the 2023 Skytrax World Airline Awards, it flies to international destinations. By renewing its fleet with the most energy-efficient aircraft in their category, it is committed to a healthier environment, knowing that this is essential to its operations and the destinations it serves. Transat has been Travelife-certified since 2018. www.transat.com