Transat A.T. (TSE:TRZ) Releases Quarterly Earnings Results

Transat A.T. (TSE:TRZ) announced its quarterly earnings data on Thursday. The company reported C($2.18) EPS for the quarter, FiscalAI reports. The company had revenue of C$792.72 million during the quarter. Transat A.T. had a negative net margin of 6.57% and a positive return on equity of 31.06%.

Here are the key takeaways from Transat A.T.’s conference call:

• High fuel prices severely pressured profitability: Q3 revenue rose 3% to CAD 793 million, but adjusted EBITDA fell to negative CAD 1 million from positive CAD 81 million, while adjusted net loss widened to CAD 89 million. Fuel expense increased 50% year over year, and management said current fares still do not fully cover the higher costs.
• Liquidity and operating risks remain elevated. Free cash flow was negative CAD 302 million in Q3, cash declined to CAD 243 million, and four aircraft remained grounded because of Pratt & Whitney GTF engine issues; related disruptions and costs are expected to persist until at least 2028. Transat has fully drawn CAD 150 million under LASR and expects an additional CAD 250 million government loan to provide sufficient liquidity based on the current fuel-price forward curve.
• Demand remained resilient despite intense competition. Revenue and traffic increased, transatlantic yield rose 0.6% despite 8% capacity growth, and fourth-quarter load factor is currently 0.6 percentage points ahead of last year with yield broadly stable. Management plans no capacity growth for the upcoming winter and is reallocating capacity toward stronger-performing destinations.
• Strategic revenue initiatives are progressing. The loyalty program has more than 23,000 beta members and is tracking ahead of initial engagement expectations, while cabin reconfigurations beginning in the second half of 2027 are intended to expand premium seating and ancillary revenue. Management expects the loyalty program’s material contribution to emerge over roughly three years.

Transat A.T. Price Performance

Shares of TSE:TRZ opened at C$1.89 on Friday. Transat A.T. has a twelve month low of C$1.78 and a twelve month high of C$3.10. The company’s 50 day moving average is C$2.29 and its 200 day moving average is C$2.45. The company has a current ratio of 0.58, a quick ratio of 0.76 and a debt-to-equity ratio of -180.72. The company has a market cap of C$77.87 million, a PE ratio of -0.33, a price-to-earnings-growth ratio of -0.04 and a beta of 1.49.

Transat A.T. News Summary

Here are the key news stories impacting Transat A.T. this week:

• Positive Sentiment: Transat secured an additional C$250 million in emergency federal aid, providing near-term liquidity and support for operations despite its quarterly loss. Transat secures an additional $250M in emergency federal aid, reports Q3 loss
• Neutral Sentiment: Analyst views remain mixed. Desjardins lowered its target to C$2.50 but maintained a “hold” rating, while TD reduced its target to C$2.00 and also kept a “hold” rating. These targets imply potential upside, but the cuts reflect more cautious expectations. Transat analyst price-target updates
• Negative Sentiment: Scotia lowered its price target from C$2.00 to C$1.65 and assigned a “sector underperform” rating, signaling expectations that Transat may lag its industry peers.
• Negative Sentiment: Transat reported a third-quarter loss, with earnings of approximately C$2.18 per share below zero and revenue of about C$792.7 million. Reports attributed the deterioration largely to soaring fuel costs, which threaten airline margins. Transat A.T. Inc. Reports Results for the Third Quarter of Fiscal 2026 Transat reports quarterly loss on soaring fuel costs

Wall Street Analyst Weigh In

A number of research analysts have issued reports on TRZ shares. TD cut their price target on shares of Transat A.T. from C$2.25 to C$2.00 and set a “hold” rating on the stock in a research note on Friday. National Bank Financial downgraded shares of Transat A.T. from a “sector perform” rating to an “underperform” rating and lowered their price objective for the stock from C$3.00 to C$2.25 in a research note on Wednesday, May 27th. Scotia dropped their price objective on shares of Transat A.T. from C$2.00 to C$1.65 and set a “sector underperform” rating on the stock in a report on Friday. Finally, Desjardins cut their target price on Transat A.T. from C$2.80 to C$2.50 and set a “hold” rating on the stock in a research report on Friday. Three equities research analysts have rated the stock with a Hold rating and two have given a Sell rating to the company. Based on data from MarketBeat, the company currently has an average rating of “Reduce” and a consensus target price of C$2.28.

Transat A.T. Company Profile

Air Transat is a leading travel brand voted 2025 World’s Best Leisure Airline by passengers at the Skytrax World Airline Awards. Its program offers access to international destinations, mainly in Europe, the Caribbean, the east coast of the United States, South America and North Africa. Air Transat is recognized for its excellent customer service. Its fleet includes some of the most energy-efficient aircraft in their category. Based in Montreal with major hubs in YUL Montréal-Trudeau International Airport and Toronto Pearson Airport (YYZ), it has 5,000 employees with a common purpose to bring people closer together.