A traveller walks past an Air Transat logo in departures at Montreal-Pierre Elliott Trudeau International Airport in Montreal on Dec. 9, 2025. The Canadian Press/Christinne Muschi
Transat A.T. Inc. has secured an additional $250 million in emergency financing from the federal government after high fuel costs drove it further into the red last quarter.
The new low-interest line of credit from the Canada Enterprise Emergency Fund comes on top of the $150-million loan the travel company received from Ottawa over the summer to help offset soaring energy prices caused by the Iran war.
“Our third-quarter results were significantly impacted by sustained higher fuel prices, which remained elevated well beyond expectations and were the primary driver of lower profitability,” Transat CEO Annick Guérard said in a news release Thursday.
The parent company of Air Transat reported a loss of $106.6 million in the quarter ended July 31, versus about $400 million in profits in the same period a year earlier when it benefited from a $345-million gain related to its long-term debt.
The airline has proven largely unable to pass on the higher fuel costs to customers, a fact that left National Bank analyst Cameron Doerksen “surprised.” Unit revenue—a key metric gauging the average fare paid per mile per passenger—was up just 0.6 percent year-over-year throughout the summer.
In contrast, Air Canada reported unit revenue increased by about 11 percent in its latest quarter, “and most other airlines globally have had at least some success in raising fares to offset fuel,” Doerksen said in a note to investors.
“Unless fuel prices fall significantly or Transat can find a way to increase fares materially, the company will continue to incur losses.”
Guérard said intense competition curtailed the company’s ability to shift the swelling cost of fuel onto passengers’ shoulders.
To restore profitability, she said Transat will keep its focus on launching a loyalty program by the end of the year and expanding its offering of premium fares in the second half of 2027, a move that involves reconfiguring its plane cabins.
In its latest quarter, fuel costs jumped by 56 percent or $105 million compared to the year before, the Montreal-based company said. The financial hit brings the cumulative toll of the energy crisis to $175 million so far this year, it said.
Third-quarter revenues rose three percent year-over-year to $792.7 million.
On an adjusted basis, Transat said it lost $2.18 per share compared with an adjusted loss of 28 cents per share a year earlier.
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