Transat A.T. Inc.

Bonjour, Mesdames et Messieurs. Bienvenue à la conférence Transat. Good morning, ladies and gentlemen. Welcome to the Transat conference call. Note that this call is being recorded. And I would like to turn the meeting over to Ms. Andréanne Gagné, Senior Director, Communications and Corporate Affairs. Please go ahead, Ms. Gagné.

Thank you, Sylvie. Bonjour et bienvenue à cet appel trimestriel de Transat. Hello, everyone, and thank you for attending our earnings call of the second quarter ended April 30, 2024. I'm here this morning with Annick Guérard, President and CEO, and Jean-François Pruneau, our Chief Financial Officer. Annick will provide an overview of the quarter and share comments on the current operational situation and commercial plans for the future. Jean-François will have to cover our financial results in more detail. We will then take questions from financial analysts. Questions from journalists will be handled offline after this call. The conference call will be held in English, but questions may be asked in French or English. As usual, our investor's presentation has been updated and is posted on our website in the investor section. Jean-François may refer to it as he presents the results. Our comments and discussion today may contain forward-looking information about Transat's outlook, objectives, and strategies that are based on assumptions and subject to risk and uncertainty. Forward-looking statements represent Transat's expectations as of June 6, 2024, and accordingly are subject to change after such dates. Our actual results could differ materially from any stated expectations. Please refer to our forward-looking statement in Transat's second quarter news release available on Transat.com and on TEDAW. With that, let me turn the call over to Annick for opening remarks.

Good morning, everyone. Thank you for joining us for our fiscal 2024 second quarter conference call. Transat delivered double-digit revenue growth for a second straight quarter in Q2 2024 on the strength of sustained customer traffic. On the profitability side, adjusted EBITDA decreased to $38 million due to well-documented industry-wide and company-specific issues, including a highly competitive environment creating downward pressure on yields and the ongoing impact of Fred & Whitney engine issues. We promptly responded to the situation by implementing initiatives to mitigate the impact of these challenges that will remain over a longer period. In terms of our financial position, We continued our ongoing deleveraging efforts, which totaled approximately $110 million in debt repayments in the last three quarters. Jean-François will provide you with more details in his financial overview. Turning to operating metrics for the quarter, customer traffic increased 12% from the second quarter of 2023, while overall capacity grew 13%. Capacity offered for sub-destination, our main programs during the quarter, also increased 13% year-over-year. Our load factor of 85.5% for the second quarter remained largely in line with last year. However, yield decreased 7.5% year-over-year due to increased competition industry-wide, the ongoing economic slowdown, the negative effects of potential strikes on revenues and inefficiencies related to grounded aircraft. Regarding our on-time performance, despite an increase in flight volume year over year, second quarter results showed a marked improvement by 9 percentage points. This demonstrates our operational teams unparalleled focus and execution. As we look ahead to the second half of the fiscal year, we are fully prepared from an operational standpoint to welcome passengers for the summer season. Our team has worked diligently to ensure our operations are seamless and efficient. First, we recently completed the process of bringing in-house passenger and rent services at Trudeau's International Airport. The Montreal airport represents a key hub for Transat where we have a strong footprint and operate a high volume of flights. We firmly believe this strategic move will improve customer service and enhance our well-earned reputation in this area. We have already seen an increase in customer satisfaction as a result. Second, we've just launched this week the first phase of our joint venture with Porter Airlines, which will generate incremental customer traffic. Travelers can now book direct and connecting flights with either Air Transat or Porter. Our co-chairing partnership results so far have been in line with our expectations, so we are confident about the added potential of this GV. Third, we are taking delivery of seven additional aircraft for this summer, including four A321LRs, bringing the total to 19, and three A330 aircraft on permanent leases to mitigate the impact of grounded planes. Turning to key indicators, load factors for the summer seasons are currently down 2.1 percentage points from the same period last year, while yields are 8% lower. Reflecting current market conditions and aircraft availability, we have adjusted our capacity expansion plans slightly for fiscal 2024 from 13 to 11%. Our flight portfolio, however, remains the same, with a total of 45 destinations covered this summer, including the addition of Marrakech and Lima. In summary, we delivered encouraging top-line results in the second quarter, despite prevailing challenges, both industry and customer specific. We are highly optimistic about our commercial joint venture with Porter, which is expected to generate incremental bookings. We reimbursed $110 million in debt during the last three quarters to improve our overall financial position. However, it is clear that this year is a challenging one for Transat. We are facing multiple external factors, some beyond our control, but also some in areas where we can make a significant difference. We are proactively implementing measures to navigate these turbulent times effectively. In an industry that has endured significant damage stemming from the pandemic, including severe supply chain disruptions, patience and resilience are crucial. It is not a straightforward journey, but with our dedicated team and strategic initiatives, we are confident in our ability to overcome these obstacles. Before I close, I would like to thank our loyal customers and recognize the unwavering commitment of our team in providing outstanding customer service, which remains at the core of everything we do at Transact. This concludes my remarks. Jean-Francois will now review our financial results.