Transat A.T. (TRZ) investor relations material

Executive summary

• Second quarter revenues were $1,028 million, down 0.3% year-over-year, mainly due to the suspension of Cuba flights and lower compensation from engine manufacturers.

• Profitability was significantly impacted by an industry-wide fuel crisis, persistent Pratt & Whitney GTF engine issues, and the suspension of Cuba operations, resulting in a net loss of $79 million and negative adjusted EBITDA of $21 million.

• Free cash flow dropped to $59 million from $142 million a year ago.

• Mitigating actions included fuel surcharges on new bookings and a 6% reduction in network capacity from May to October 2026.

• The company plans to apply for up to $150 million in government funding to address fuel cost pressures.

Financial highlights

• Revenue was $1,003 billion, stable year-over-year; Cuba suspension caused an $81 million revenue shortfall.

• Adjusted EBITDA was negative $21 million, down from $98 million last year, mainly due to $70 million in extra fuel costs and $25 million from Cuba suspension.

• Net loss was $79 million versus $23 million last year; adjusted net loss was $105 million compared to adjusted net income of $5 million.

• Cash and cash equivalents stood at $390 million at quarter-end, with net cash position of $70 million, up from $12 million in Q1.

• Long-term debt and deferred government grants decreased to $320 million from $812 million a year ago.

Outlook and guidance

• Capacity for fiscal 2026 is projected to increase 4%-5% year-over-year, revised down from 5%-7%.

• Fuel surcharges are expected to gradually offset higher fuel costs, with full mitigation anticipated by year-end.

• LASER facility will provide up to $150 million in funding, with monthly drawdowns retroactive to May 1, to support liquidity amid elevated fuel prices.

• Ongoing cost recalibration and operational adjustments are planned to address new pilot agreement costs and market volatility.

• The company expects to meet obligations with cash on hand, operations, and potential government funding.