Transat A.T. (TRZ) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenue grew 5.9% year-over-year to $1,031 million, with adjusted EBITDA rising to $98.4 million, driven by higher yields, increased passenger traffic, lower fuel costs, and productivity gains.

• Net loss narrowed to $22.9 million ($0.58/share) from $54.4 million ($1.40/share) in Q2 2024.

• The Elevation Program delivered a $67 million annualized adjusted EBITDA run-rate, targeting $100 million by mid-2026.

• Major debt restructuring agreements were reached, reducing outstanding LEEFF debt by more than half and significantly deleveraging the balance sheet.

• Free cash flow improved to $142.3 million, up from $109.8 million a year ago.

Financial highlights

• Q2 2025 revenue: $1,031 million, up 5.9% year-over-year.

• Adjusted EBITDA: $98.4 million, up from $30.2 million in Q2 2024.

• Adjusted net income: $5 million ($0.12/share) vs. adjusted net loss of $47 million ($1.21/share) last year.

• Cash and equivalents: $533 million as of April 30, 2025.

• Free cash flow for Q2: $142 million, up from $110 million last year.

Outlook and guidance

• Capacity for fiscal 2025 expected to increase by 1.0–1.5% year-over-year, with no new aircraft deliveries planned due to grounded aircraft.

• Yields for the summer season are 1.7% ahead of last year, but load factors are 1.2 percentage points lower.

• Elevation Program expected to reach $100 million annualized adjusted EBITDA run-rate by mid-2026.

• Debt restructuring expected to close in Q3 2025, with a projected gain on debt forgiveness of approximately $370 million.

• Some softness in European bookings for Q4, with a cautious outlook for the next 18 months due to economic uncertainty.