Transat A.T. Inc. posted a strong financial performance for the second quarter of fiscal 2025, reporting improved revenue, profitability, and a major step forward in reducing its debt load.
“Transat delivered improved operating and financial performances in the second quarter of fiscal 2025, building on the positive momentum that began in the fourth quarter of 2024,” said Annick Guérard, President and CEO of Transat.
“Despite persistent economic uncertainty, Transat is methodically executing its business strategy through disciplined fleet optimization and network expansion.”
Revenue for the quarter ended April 30 reached CAD$1.03 billion, a 5.9% increase over the same period last year. The growth was supported by a 2% rise in airline unit revenue (yield), a 1.6% increase in passenger traffic, and a one-time $20 million financial compensation related to GTF engine issues.
Adjusted EBITDA climbed to CAD$98.4 million, up sharply from CAD$30.2 million in Q2 2024. The company cited higher revenue, operational efficiency, and an 18% drop in fuel costs as the main drivers.
Guérard said Transat’s ongoing Elevation Program — an optimization plan targeting long-term growth — is showing results. “The initiatives implemented to date are expected to generate an annualized adjusted EBITDA run rate of $67 million and we remain on track to reach our goal of $100 million,” she said.
Cash flow from operations rose to $207.8 million, with free cash flow at $142.3 million for the quarter. As of April 30, Transat held $532.6 million in cash and cash equivalents, up from $260.3 million in October 2024.
CFO Jean-François Pruneau highlighted a recent refinancing deal as a key milestone.
“This represents a major milestone, as it significantly reduces our debt, strengthens our balance sheet, and positions Transat to further implement its long-term strategic plan,” he said. He also noted a new compensation agreement with the manufacturer of GTF engines covering 2025 and 2026, part of which was recorded as non-cash revenue.
Following quarter-end, Transat announced an agreement in principle with the Canada Enterprise Emergency Funding Corporation (CEEFC) to restructure CAD$773.4 million in debt. Once finalized, the outstanding balance is expected to fall to CAD$333.7 million.
Transat’s summer load factors are currently tracking 1.2 percentage points below last year, but yield is up 1.7%. The company expects a modest 1% increase in available seat miles for the full year.
Complete Q2 results here.
Third-quarter results are scheduled for release on September 11, 2025.
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