Transat A.T. (TRZ) investor relations material

Executive summary

• Shareholders reaffirmed support for the turnaround plan, elected a renewed board, and continued executing strategic initiatives, including the Elevation Program and a new five-year pilot agreement, despite disruptions like Hurricane Melissa and Cuba flight suspensions.

• The Elevation Program drove operational improvements, with approximately CAD 70 million of the targeted CAD 100 million in adjusted operating income already realized.

• Strategic partnership announced with Desjardins Group and Visa Canada for a co-branded credit card and loyalty program, launching in H2 2026.

Financial highlights

• Revenue increased 5% year-over-year to CAD 871 million in Q1 2026, driven by higher traffic and improved yields.

• Adjusted EBITDA rose 68% to CAD 34 million (3.9% margin), reflecting disciplined cost management and higher revenues.

• Net loss narrowed to CAD 29 million (CAD 0.73/share), a $94 million improvement year-over-year.

• Adjusted net loss was CAD 48 million (CAD 1.18/share), an improvement from CAD 75 million (CAD 1.90/share) last year.

• Free cash flow reached CAD 247 million, up from CAD 129 million in Q1 2025.

• Cash and cash equivalents stood at CAD 387 million at quarter-end, up from CAD 165 million at the end of Q4 2025.

• Long-term debt and deferred government grants declined to CAD 375 million, with further repayments post-quarter reducing it to CAD 345 million.

• Net cash position improved to CAD 12 million from a net debt of CAD 235 million three months earlier.

Outlook and guidance

• Q2 2026 planned capacity is up 5% year-over-year, with yields tracking in line with last year and load factors 1.8 percentage points lower.

• Full-year fiscal 2026 capacity growth is expected at 5%-7%.

• The Cuba suspension will impact Q2 results, but redeployment to other destinations is mitigating the effect; minimal impact expected for summer.

• No planned aircraft deliveries in 2026; A321XLR deliveries anticipated to begin in 2027.

• Lower interest charges and a stronger Canadian dollar are expected to benefit costs.