Further Progress on Elevation Program
First-quarter highlights:
- Revenues of $829.5 million, up 5.6% from $785.5 million last year
- Adjusted EBITDA of $20.0 million, compared to negative Adjusted EBITDA of $3.3 million last year
- Net loss of $122.5 million ($3.10 per share), compared to a net loss of $61.0 million ($1.58 per share) last year
- Free cash flow of $129.1 million, compared to $39.1 million last year
- Customer deposits of $1,034.3 million, up 0.7% from January 31, 2024
- Extension of the $312.0 million LEEFF subordinated financing maturity from April 2026 to April 2027, and the $50.0 million revolving term credit and $41.4 million LEEFF secured financing maturities from February 2026 to November 2026
- Elevation optimization Program initiatives implemented to date are expected to deliver an annualized adjusted EBITDA run-rate of $37.0 million
MONTRÉAL, March 13, 2025 /CNW/ – Transat A.T. Inc., a leisure travel reference worldwide, operating as an air carrier under the Air Transat brand, announced today its results for the first quarter ended January 31, 2025.
“The first quarter of fiscal 2025 ended with a better performance compared to the same period last year despite economic uncertainty. Higher traffic and a disciplined capacity increase of 0.5% resulted in a yield improvement of 1.7% year-over-year. Transat’s financial results also progressed with revenue growing 5.6% from the first quarter last year and adjusted EBITDA totaling $20.0 million driven by reduced fuel costs and a tight control on operating expenses,” said Annick Guérard, President and Chief Executive Officer of Transat.
“Our Elevation Program, a comprehensive optimization plan aimed at maximizing long-term profitable growth, continues to advance as anticipated. Once fully deployed, the initiatives implemented to date are expected to generate an annualized adjusted EBITDA run-rate of $37 million. The program remains on track to reach $100 million by mid-2026. The initial phase has optimized our organizational cost structure, with efficiency gains and cost savings generated through the implementation of new technology tools and AI. In the upcoming months, we will move forward revenue management initiatives and various productivity measures to further bolster profitable growth,” added Ms. Guérard.
“The refinancing of our debt of more than $800 million and the strengthening of our balance sheet remain our top priorities. Assisted by a special advisory committee of the Board of Directors composed of independent directors, we continue to explore all alternatives that will allow us to implement an optimal capital structure over the long term. Although they have not yet led to a permanent solution, discussions with our main lender, the Federal Government, initiated more than 18 months ago, and other stakeholders are still ongoing. Given the complexity of these discussions, and to provide greater flexibility while they continue, we recently extended the maturity dates of our subordinated and secured LEEFF financing agreements with the federal government to April 2027 and November 2026, respectively. Additionally, we renegotiated our revolving credit facility, extending its maturity to November 2026,” concluded Ms. Guérard.
First-quarter results
For the three-month period ended January 31, 2025, revenues reached $829.5 million, up 5.6% from $785.5 million in the corresponding period last year. The increase in revenues is attributable to a 1.7% increase in airline unit revenues (yield) and a 1.0% increase in traffic expressed in revenue-passenger-miles (RPM) compared with 2024. Reflecting disciplined management, the Corporation’s capacity was up 0.5% from the corresponding period last year.
Adjusted EBITDA stood at $20.0 million, compared with negative adjusted EBITDA of $3.3 million a year ago. This increase reflects revenue growth, a 15% decrease in fuel prices compared with the corresponding period of 2024, as well as lower aircraft rent expenses. These factors were partially offset by slightly higher operating expenses associated with capacity expansion.
Cash flow and financial position
Cash flow related to operating activities amounted to $168.6 million during the first quarter of 2025, compared with $110.7 million for the same period last year, mainly due to more favourable changes in working capital balances this year versus last. After accounting for investing activities and repayment of lease liabilities, free cash flow reached $129.1 million during the quarter, compared with $39.1 million for the corresponding period last year.
As at January 31, 2025, cash and cash equivalents amounted to $389.4 million, compared to $453.3 million at the same date in 2024 and $260.3 million as at October 31, 2024. Cash and cash equivalents in trust or otherwise reserved mainly resulting from travel package bookings totalled $604.2 million as at January 31, 2025, compared with $612.2 million as at January 31, 2024 and $453.8 million as at October 31, 2024.
During the quarter ended January 31, 2025, the Corporation received net proceeds of $30.6 million from the final of the four previously announced spare engine sale-leaseback transactions, completed in early November.
Reflecting the proceeds mentioned above and the change in cash, long-term debt and deferred government grant, net of cash, amounted to $424.0 million as at January 31, 2025, down from $542.7 million as at October 31, 2024.
About Transat
Founded in Montreal 37 years ago, Transat has achieved worldwide recognition as a provider of leisure travel particularly as an airline under the Air Transat brand. Voted World’s Best Leisure Airline by passengers at the 2024 Skytrax World Airline Awards, it flies to international destinations. By renewing its fleet with the most energy-efficient aircraft in their category, it is committed to a healthier environment, knowing that this is essential to its operations and the destinations it serves. Based in Montreal, Transat has 5,000 employees with a common purpose to bring people closer together. (TSX: TRZ) www.transat.com