Transat investor and Quebecor CEO Pierre Karl Péladeau would like a seat on the airline's board as part of broader changes at the company.Christopher Katsarov/The Canadian Press
Pierre Karl Péladeau has launched a battle for control of Transat AT Inc. TRZ-T, calling for the ouster of the airline’s chair and a top-to-bottom review of its operations and direction.
In an interview on Monday, the chief executive officer of telecom and media company Quebecor Inc. called for a restructuring of the company’s balance sheet that would enable the company to attract new investment to fuel growth. He is also seeking a review that includes the direction, senior management and cost structure at Transat, which he labelled an operational and financial underperformer.
Mr. Péladeau, whose Financière Outremont Inc. owns 9.5 per cent of Montreal-based Transat, wants chair Susan Kudzman replaced by André Brosseau and the number of company directors reduced to six from 11.
“The goal is not to sell the company,” he told The Globe and Mail. “My interest at the beginning was to take control of the company and grow it. There’s a lot of examples in life that shows that there’s money to be made in airlines.”
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Founded in 1986, Transat is a leisure-focused carrier that sells flights and vacation packages to destinations in Europe, the Caribbean and elsewhere with 43 planes.
Transat has a strong brand – especially in Quebec – and is popular with travellers, said Mr. Péladeau, who has been a Transat investor for about four years.
“The fundamentals of the industry is good, but you need to run the company according to proper practices,” he said.
Mr. Péladeau, who is seeking a seat in the boardroom alongside his nominee Jean-Marc Léger, said he is taking these steps after failing to convince the company that a change in direction is needed.
Mr. Péladeau is calling for a special shareholders meeting and boardroom elections by Feb. 6.
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Transat said in a statement that it is reviewing Mr. Péladeau’s proposals but expressed confidence in its own strategic plan.
Company directors have met with Mr. Péladeau and remain open to “constructive input that serves the best interest of the company and all shareholders,” the statement said.
“The board and management team have a clear, disciplined plan for the company, and we are confident in the direction we are pursuing to create long-term value,” Ms. Kudzman said.
Mr. Péladeau’s battle caps years of uncertainty for Transat. The company agreed in 2019 to a takeover by Air Canada. The deal was approved by the Canadian government but fell apart after the European Commission said antitrust concerns would mean a rejection.
Transat is saddled with a large debt after taking a taxpayer bailout in the pandemic.
Transat said in July it had restructured its bailout debt, reducing it to $334-million from $772-million. In return, the government received a 20-per-cent stake in the airline.
Mr. Péladeau lost a court battle trying to force a shareholder vote on the deal, which would typically take place.
He said on Monday he would renegotiate the agreement, which makes the government the company’s largest shareholder and creditor at the same time it is the regulator. How can a party that holds the three roles have the company’s best interests in mind, he asked.
Transat’s share price on the Toronto Stock Exchange closed up 18 per cent on Monday but has fallen by 61 per cent over the past five years. The company lost $114-million in 2024 and $25-million in 2023.
Mr. Péladeau declined to say if he wanted to replace Transat’s chief executive officer of four years, Annick Guérard.
“We’ll sit with the management, we’ll sit with the CEO and figure out where we should go. We intend to work as a team to achieve the goals. If we were not able to achieve it, then people will need to take their respective responsibility,” he said.
Meanwhile, Transat’s 700 pilots represented by the Air Line Pilots Association are holding a strike authorization vote ahead of the Dec. 10 stoppage/lockout deadline. Voting ends on Dec. 2. The two sides have been in contract talks since January.