LOCATION: National
Issue/Source: N/A
Date: June 2025
Suggested Responses
- While Air Transat’s LEEFF (Large Employer Emergency Financing Facility) falls under the purview of the Minister of Finance, as Minister of Transport I am pleased to see that an important Canadian carrier in Air Transat has secured a restructuring of their debt. A healthy and competitive Canadian air industry is good for all Canadians.
If Pressed
- During the pandemic, Canada’s air sector was particularly hard hit as the entire travel industry grinded to a halt. As such, the Government of Canada freed up to billions of dollars to help the industry stay afloat.
- The government provided Air Transat with significant loans to allow them to maintain operations, resulting from the pandemic.
- As the air sector’s recovery continues, I am very pleased to hear that Air Transat, an important market player, has secured an agreement to restructure their debt.
- The restructuring of Air Transat’s debt will not only bolster their liquidity but will also protect taxpayer investment in the company itself.
- Air Transat’s continued presence in the Canadian market helps boost competitiveness and provides jobs for thousands of Canadians.
BACKGROUND INFORMATION
Air Transat’s Financial Situation
- Air Transat is a Canadian air carrier, and a business unit of Transat A.T. Inc., which is a leading integrated international tourism company specializing in holiday travel and offering vacation packages, hotel stays and air travel for leisure travelers.
- Air Transat took out over a billion dollars’ worth of loans with the Government of Canada throughout the pandemic.
- In 2024, Air Transat reported a net loss of $114M. However, in Q4, 2024 Air Transat reported a net income of $41M, which was up from $3.2M from the prior year. This was due primarily to favorable fuel pricing, the Pratt & Whitney compensation, and the sale/leaseback of their engines adding to their cash position.
LEEFF Loan Restructure
- On March 31, 2025, Air Transat’s outstanding LEEFF debt was reduced from $772 to $334M as part of an initial restructure with the Canada Enterprise Emergency Funding Corporation (CEEFC).
- On June 5, 2025, Air Transat announced a new LEEFF restructure deal with CEEFC, which issued a restructured credit facility of $175M, down from a $334M restructure in March.
- Transat’s credit facility will now have a 10-year term, with interest rates of 1.22% over the first three years, and 3% every subsequent year.
- The restructure includes an issuance of a $158M debenture, maturing in 10 years, as well as a 19.9% issuance of preferred shares, which are convertible into Class B Voting shares, essentially providing the Government of Canada with a 19.9% ownership stake in Air Transat.
- The closing of the transaction is expected to take place in the third quarter of the 2025 calendar year.