An Air Transat aircraft departs Toronto Pearson International Airport. Montreal-based Transat posted a $242-million profit in its most recent fiscal year.Mike Campbell/Reuters
Transat AT Inc. TRZ-T posted its first annual profit since 2018 on Thursday, as revenue rose and a government agreement reduced its pandemic bailout debt.
The Montreal-based operator of Air Transat swung to a $242-million profit, or $6.06 a share, in the fiscal year ended on Oct. 31, compared with a loss of $114-million ($2.94) in 2024. Revenue rose by 3.5 per cent to $3.4-billion.
Transat chief executive officer Annick Guérard said new routes and the debt refinancing helped the airline overcome a volatile economy and the downtime of aircraft from the Pratt and Whitney engine recall.
“We fully achieved our 2025 objectives, and we are on track to continue performing according to plan in 2026,” Ms. Guérard said on a conference call with analysts, held to discuss the annual and fourth-quarter results, which were released before markets opened.
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For the three months ending on Oct. 31, Transat lost $12.5-million (31 cents), compared with a profit of $41.2 million ($1.05) in the same period a year ago. Revenue fell by 2.2 per cent to $771.6 million, compared with the fourth quarter of 2024.
Transat attributed the lower quarterly revenue to a drop in compensation from Pratt and Whitney, whose plane engines have been subject to a recall.
For 2025, Transat collected $32-million from the engine maker. Ms. Guérard said the recall grounded between six and eight of the airline’s 43 planes in 2025. In 2026, she said, three to five planes will be grounded, and the fleet should be fully updated by 2028.
Ms. Guérard said the threat of a strike by the company’s 750 pilots last week had a small impact on sales as travellers balked at bookings. She said she is optimistic that the pilots, represented by the Air Line Pilots Association, will approve a tentative agreement in the coming days.
The five-year proposal brings pay raises of between 49 per cent and 67 per cent over the term of the contact, as well as scheduling and quality-of-life improvements.
Transat is facing a battle for control of its boardroom. Pierre Karl Péladeau, who controls 9.5 per cent of Transat through Financière Outremont Inc., wants to replace the 11-member board with six directors, including himself and two others. Mr. Péladeau says he can chart a new path for a company that he says is underperforming financially and operationally.
Under pressure from Mr. Péladeau, Transat has scheduled a board vote at its annual meeting on March 10.
The company’s share price has fallen by 55 per cent over the past five years on the Toronto Stock Exchange.
Transat in the summer renegotiated its $762-million bailout debt owed to taxpayers in a deal that gave Ottawa a 20-per-cent ownership stake. As of Oct. 31, Transat owes $350-million under the Large Employer Emergency Financing Facility, designed to keep companies from failing in the pandemic.
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Like most airlines, Transat halted operations during parts of the pandemic to comply with travel bans and limit the spread of the deadly disease.
However, the debt agreement has angered Mr. Péladeau, who says it places the federal government in the position of stockholder, regulator and creditor, and limits the company’s investment opportunities.
He lost a court battle over the agreement in the summer but has vowed to renegotiate it should he win control of the boardroom.