Canadian tour operator and airline Transat AT Inc. has reported a 5% rise in revenue to $870.7mn for the first quarter of fiscal 2026, ended January 31, with profitability improving markedly as its Elevation cost-efficiency programme gains traction.
Adjusted EBITDA rose 68% year on year to $33.6mn, supported by higher unit revenues, traffic growth and tighter cost control. The net loss narrowed to $29.5mn ($0.73 per share) from $122.5mn ($3.10 per share) a year earlier, while adjusted net loss improved to $47.9mn from $75mn.
Traffic grew 2.2% and yield rose 1.4%, marking a fifth consecutive quarter of yield improvement. Operating cash flow nearly doubled to $296.4mn, with free cash flow reaching $246.6mn against $129.1mn in the prior year period. The company swung to a net cash position during the quarter.
Capacity grew 1% overall, including a 4.4% increase on sun routes. Transat temporarily suspended flights to Cuba until April 30 due to an anticipated fuel shortage, redeploying capacity across its South network. Pratt and Whitney GTF engine constraints and weather disruptions linked to Hurricane Melissa in Jamaica also affected performance.
The company said unit revenues for the second quarter were currently in line with last year on around 5% higher capacity, though load factors were tracking 1.8 percentage points lower. Transat cautioned the outlook did not account for rising fuel prices driven by the Middle East conflict.
Transat’s annual meeting was scheduled for March 10, where Quebec media magnate Pierre Karl Péladeau is seeking to overhaul the company’s board. Both Glass Lewis and Institutional Shareholder Services recommended shareholders vote against the Quebecor chief executive’s proposal to install himself and two associates on a reduced board, Canadian Press reported.