Transat closes out 2025 with a full-year profit, aims to boost flight volumes

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MONTREAL — Travel company Transat A.T. Inc. on Thursday reported its third quarterly loss this year, but still closed out 2025 by turning an annual profit for the first time since 2018 ahead of a push to boost capacity in the new year.

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The Air Transat owner saw revenues and traffic volumes dip in its fourth quarter, resulting in a $12.5-million loss versus net income of $41.2 million in the same period the year before.

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But last year’s windfall came mostly from compensation doled out by aircraft engine giant Pratt & Whitney after it recalled turbofans for inspection and repair. Air Transat continues to ground planes due to the manufacturer’s engine recall, which has also impacted numerous other airlines.

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“Fourth-quarter revenues declined slightly as substantially lower year-end compensation from Pratt & Whitney overshadowed underlying revenue growth driven by higher yields” — a metric that gauges the average revenue an airline garners per paying passenger for each mile flown — said chief executive Annick Guerard in a release.

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The CEO also highlighted a “volatile macroeconomic environment” that has made some Canadians more hesitant to shell out dollars on trips abroad.

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Others seem more eager than ever, however. The number of Canadians returning from overseas rose nearly 12 per cent year-over-year to 1.1 million in November, according to preliminary figures from Statistics Canada. Meanwhile, return trips by air from the United States dropped more than 19 per cent.

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Air Transat largely flies to destinations in Mexico, the Caribbean and Europe.

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As demand for flights to Florida, Las Vegas and other American cities continues to plummet, the airline is seeking out destinations farther afield.

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“Targeted network expansion across destinations in Africa, Europe and South America, combined with fewer grounded aircraft and network optimization, should result in increased capacity for 2026” _ between six and eight per cent — Guerard said.

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She also noted that Transat has renegotiated all major collective agreements through 2027 and beyond, paving the way for relative labour peace at the airline.

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Last week, Transat narrowly avoided a costly work stoppage when it reached a last-minute tentative deal with the union representing its 750 pilots that boosted their wages by more than 50 per cent over five years.

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The showdown came at a particularly fraught time for the company as it struggles to manage a large net debt load — $1.6 billion — and fend off a coup attempt from an activist investor.

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Earlier this month, media mogul Pierre Karl Peladeau _ Transat’s second-biggest shareholder with 9.5 per cent of the company’s shares — demanded a strategic overhaul and a board shakeup that would give him and two allies seats.

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In response, Transat announced on Monday a shareholder meeting scheduled for March 10 to vote on the board overhaul and other changes sought by Peladeau, the CEO of Quebecor Inc.

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On Thursday, Transat reported that fourth-quarter revenue totalled $771.6 million, down two per cent from $788.8 million a year ago.

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On an adjusted basis, the Montreal-based company said it lost 42 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year, and well below analysts’ expectations of 12 cents per share, according to financial markets firm LSEG Data & Analytics.

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This report by The Canadian Press was first published Dec. 18, 2025.

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Companies in this story: (TSX:TRZ)

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