Canadian leisure carrier Air Transat has reported a significant net loss for its fourth fiscal quarter, a result that arrives alongside mounting pressure from a key investor for a substantial shakeup of the company's board of directors.
Financial Performance Details
In its financial results released on December 18, Transat A.T. Inc., the parent company of Air Transat, disclosed a net loss of $12.5 million, equating to a loss of $0.31 per share. This starkly contrasts with the net income of $41.2 million, or $1.05 per share, recorded in the same period the previous year, marking a dramatic year-over-year decline of 130.3%.
The company's adjusted figures were also deep in the red. For the quarter ending October 31, the adjusted net loss stood at $18.7 million, a $0.42 loss per share, compared to an adjusted net income of $31.6 million ($0.81 per share) in the fourth quarter of 2024.
Revenues saw a slight dip, coming in at $771.6 million, which is 2.2% lower than the $788.8 million generated a year earlier. CEO Annick Guérard attributed the revenue decline primarily to substantially lower year-end compensation from engine manufacturer Pratt & Whitney, which was $28.2 million less than last year. Excluding this impact, she noted that revenues actually grew by 1.5%.
Operating income plummeted to just $248,000 from $64.7 million in Q4 2024. The airline cited the lower revenues, combined with increased costs for aircraft maintenance, salaries, and employee benefits, as the main drivers. Passenger traffic, measured in revenue-passenger-miles, decreased by 2%, partially offset by a 3.3% increase in airline unit revenues, or yield.
Shareholder Pressure and Boardroom Battle
The disappointing quarterly results come on the heels of public criticism from one of Transat's largest shareholders. Pierre Karl Péladeau's Financière Outremont, which holds nearly 10% of the company's shares, has expressed strong disapproval of Transat's current financial trajectory and strategic direction.
Péladeau is actively pushing for a major restructuring of the company's governance. His proposal calls for reducing the board of directors from 11 members to just six, with half of those seats to be filled by newly elected individuals. The slate of proposed new directors includes Péladeau himself, André Brosseau (CEO of Du Musée Investments Inc.), and Jean-Marc Léger, co-founder of the market research firm Léger. Under this plan, Brosseau would assume the role of board chair.
Péladeau had requested that a shareholder meeting be held no later than February 6, 2026, threatening to withhold approval for any major company transactions if the deadline was not met. In response, the current board confirmed on December 15 that it has scheduled an annual and special meeting of shareholders for March 10, 2026.
Reacting to the chosen date, Péladeau stated he was "obviously disappointed but not necessarily surprised to see the lack of sense of urgency among the members of the Board of Directors."
Looking Ahead for Air Transat
The confluence of weak financial results and internal shareholder strife sets the stage for a pivotal period for Air Transat. The airline must navigate operational challenges, including managing costs and capacity, while simultaneously preparing for a potentially contentious shareholder meeting that could redefine its leadership and strategic oversight. The March 2026 meeting now looms as a critical event that will determine the future governance of one of Canada's prominent leisure airlines.
