Transat A.T. (TRZ) investor relations material

Executive summary

• Third quarter results were heavily impacted by persistently high fuel prices and competitive market conditions, which outweighed revenue and traffic growth and pressured profitability.

• Demand remained resilient, with revenue and traffic increasing and the transatlantic network performing well despite competition.

• Strategic initiatives advanced, including the launch of a new loyalty program, cabin reconfiguration to increase premium seating, and disciplined capacity management, with cabin modernization starting in the second half of 2027.

• Persistent Pratt & Whitney GTF engine issues continued to disrupt operations, with four aircraft grounded as of July 31, 2026.

Financial highlights

• Revenue rose 3.4% year-over-year to $793 million, driven by higher capacity and traffic.

• Adjusted EBITDA was negative $1 million, down from positive $81 million in Q3 2025, mainly due to a 56% increase in fuel costs and higher salaries.

• Net loss was $107 million, compared to net income last year that included a one-time $345 million debt extinguishment gain.

• Adjusted net loss was $89 million ($2.18/share) versus $12 million ($0.28/share) last year.

• Free cash flow was negative $302 million, compared to negative $122 million last year.

Outlook and guidance

• Q4 2026 capacity is expected to increase by 2% year-over-year, with load factor currently 0.6 percentage points higher and yields broadly in line with last year.

• Yields for Q4 are expected to increase by 6% year-over-year, but not enough to offset fuel cost increases.

• Demand for south destinations is strong for winter, with yields up and load factors similar to last year.

• Loyalty program launch is on track for end-2026, and A321XLR aircraft deliveries are expected to begin in the second half of 2027.