Transat reports net loss due to higher fuel costs, Cuba flight suspensions
'We remain focused on restoring Transat's profitability'
Transat reported a wider-than-expected adjusted loss in its fiscal third quarter of 2026, with fuel costs proving to be the main driver of the decline. The company posted an adjusted loss per share of $2.18, surpassing the forecasted loss of $1.52 per share, while revenue came in at $792.7 million, slightly below the $802.1 million expectation.
Stock prices fell 2.28%, trading at $2.14 in premarket trading. Despite a 3% revenue increase from the previous year, driven by 6% higher capacity and stronger traffic, fuel prices rose by 56%, pushing adjusted EBITDA to negative $1 million. Free cash flow was negative $302 million, indicating significant financial strain. Management acknowledged intense competition in the Canadian market and the challenging pricing environment in the airline industry.
The company is investing in a new loyalty program and cabin reconfiguration to build more premium and recurring revenue. Transat's results showed a business generating revenue growth, but at a much lower profit level, highlighting the impact of fuel inflation, higher labor costs, and operational disruptions.
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