This article first appeared on GuruFocus .
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Revenue:Increased by 5% to $871 million.
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Adjusted EBITDA:Grew 68% to $34 million.
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Net Loss:$29 million or $0.73 per share, compared to $123 million or $3.10 per share last year.
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Adjusted Net Loss:$48 million or $1.18 per share, versus $75 million or $1.90 per share last year.
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Cash Flow from Operating Activities:$296 million, up from $169 million last year.
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Free Cash Flow:$247 million, improved from $129 million last year.
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Cash and Cash Equivalents:$387 million as of January 31, 2026.
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Long-term Debt and Deferred Government Grants:$375 million, down from $400 million three months ago.
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Net Cash Position:$12 million at the end of Q1 2026, improved from a net debt position of $235 million three months earlier.
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Capacity (Available Seat Miles):Increased by 1%, with Sun routes capacity up by 4.4%.
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Load Factor:81.5%, up from 80.6% last year.
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Traffic (Revenue Passenger Miles):Rose 2.2%.
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Yield Improvement:1.4% higher than the same period last year.
Release Date: March 10, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Transat AT Inc ( TRZBF ) reported a 5% increase in revenue to $871 million for the first quarter of 2026, despite disruptions from Hurricane Melissa.
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Adjusted EBITDA grew by 68% to $34 million, driven by higher revenues and disciplined cost management.
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The company reached a milestone with the ratification of a new 5-year collective agreement with pilots, enhancing efficiency and productivity.
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Transat AT Inc ( TRZBF ) expanded its network with new destinations, contributing positively to overall performance and supporting a balanced demand profile.
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The launch of a new loyalty program in partnership with Desjardins Group and Visa is expected to create a new recurring revenue stream and strengthen customer engagement.
Negative Points
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Four aircraft were grounded in the first quarter due to ongoing GTF engine issues, with full resolution not expected until 2027 or 2028.
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The suspension of flights to Cuba due to fuel shortages is anticipated to impact second-quarter results, as Cuba represented 10% of winter season capacity.
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Operational disruptions in Puerto Vallarta affected consumer confidence, although bookings are gradually returning to expected levels.
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The company reported a net loss of $29 million for the first quarter of 2026, although this was an improvement from the previous year's loss.
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Fuel price spikes pose a challenge, with Transat AT Inc ( TRZBF ) implementing fuel surcharges and fare increases to mitigate the impact.
Q & A Highlights
Q: Can you provide more details on your fuel hedging strategy and how it protects against price increases? A: Jean-Francois Pruneau, Chief Financial Officer, explained that more than half of their fuel consumption for the second quarter is hedged, providing protection against price increases. However, he did not disclose specific levels at which they are hedged. The hedging strategy is aligned with booking patterns to mitigate fuel price spikes effectively.
Q: What benefits do you expect from the new loyalty program, and when will it be implemented? A: Annick Guerard, President and CEO, stated that the loyalty program, developed in partnership with Desjardins and Visa, is expected to launch in the second half of 2026. It aims to create a new recurring revenue stream, improve revenue quality, and drive higher load factors. The program is designed to capture a 4-5% market share that Transat currently misses due to the absence of a loyalty program.
Q: How is Transat managing the impact of geopolitical issues and operational disruptions on bookings? A: Annick Guerard noted that while geopolitical issues like the situation in Cuba and operational disruptions in Puerto Vallarta have affected consumer confidence, demand remains strong in Europe and other sun destinations. Transat is redeploying capacity to destinations like the Dominican Republic and Costa Rica to mitigate impacts.
Q: What are the expectations for capital expenditures in fiscal 2026 and 2027? A: Jean-Francois Pruneau indicated that while Q1 2026 CapEx was lower due to timing issues, there will be a catch-up, aligning with their full-year expectations. It is too early to provide specific guidance for fiscal 2027.
Q: How much progress has been made on the $100 million elevation program, and is there potential for upside? A: Jean-Francois Pruneau confirmed that they are on track to achieve the $100 million target by mid-2026, with approximately $70 million already realized. Annick Guerard added that they continue to explore new initiatives for cost savings and revenue generation, suggesting potential upside.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
