Transat AT Inc Q4 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Cameron Doerksen - National Bank Financial Research - Analyst : I wanted to maybe ask a question about yields as you look into the winter. I mean it's trending positively so far. But as we get into the second fiscal quarter, you and I think the rest of the industry have got a bit of an acceleration of capacity growth. So I'm just wondering if you have any kind of early sense of how yields are faring so far as you look into Q2 and particularly the peak March period. Is it looking positive at this point? Or just any color there would be helpful.

Question: Cameron Doerksen - National Bank Financial Research - Analyst : Okay. That's helpful. And maybe just a second question, I guess, just on the free cash flow. You mentioned that your expectation was for fiscal 2026 that free cash flow would be positive. Obviously, you do have some tailwinds here, which you highlighted. Just wondering, I guess, what you're, I guess, assuming as far as CapEx for 2026 and maybe expectations for generating cash from working capital in 2026 that gets you to that free cash flow number?

Question: Cameron Doerksen - National Bank Financial Research - Analyst : Okay. So the -- I guess, the bottom line is that the improvement in free cash flow is basically all going to be generated from improving EBITDA. Is that fair to say?

Question: Konark Gupta - Scotiabank GBM - Analyst : Just maybe to ask on the provisions first Jean-Francois. Can you describe the nature of the two parts, the total $15 million, and I think the $5 million is from one thing and a few things maybe and the $10 million is for the carbon offsets. So can you describe the nature of these provisions? And how likely are they to recur in the next few quarters?

Question: Konark Gupta - Scotiabank GBM - Analyst : Okay. That's very helpful. And with reference to the winter load factors being softer and pertaining to the second-quarter dynamics, I just want to make sure the second-quarter dynamics you're referencing there is the capacity growth in the industry. It's nothing beyond that. There's no like labor or there's one sort of onetime event?

Question: Konark Gupta - Scotiabank GBM - Analyst : Okay. And just to wrap things up for me. On the margin side, I guess, you guys are expecting some margin expansion next year as well. Can you like broadly help us understand how that margin is being driven next year? And I mean, what are some of the underlying assumptions you have? Perhaps Canadian dollar could help to some degree, but anything else, be it the broad buckets like elevation program or the fuel price assumptions you're making or any of the fleet changes?

Question: Alexander Augimeri - CIBC Capital Markets - Analyst : I was just hoping for some additional color on your elevation program. I was wondering if you could break down how much of that $100 million is now run rate realized exiting fiscal 2025 versus it being back end point?

Question: Alexander Augimeri - CIBC Capital Markets - Analyst : Okay. Perfect. And can you share any details on the skew of maybe the cost or productivity gains versus some of the revenue gains associated with that? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 18, 2025 / 3:00PM, TRZ.TO - Q4 2025 Transat AT Inc Earnings Call

Question: Alexander Augimeri - CIBC Capital Markets - Analyst : I was hoping if you could share some details on the SKU, if it's more on the cost and productivity side or if there's a revenue in there as well?

Question: Alexander Augimeri - CIBC Capital Markets - Analyst : Yes.