Canada’s Transat AT, parent of Air Transat, reports a profitable fiscal fourth quarter boosted by a C$37 million ($26 million) compensation agreement with geared turbofan (GTF) engine maker Pratt & Whitney. 

The Montreal-based company said on 12 December that it recorded a C$41 million fiscal fourth-quarter profit, compared with an C$89 million profit during the period ending 31 October of last year. 

Revenue for the period was up about 3%, year on year, to C$789 million. 

Chief executive Annick Guerard attributes the results to ”higher traffic, lower fuel costs and financial compensation from P&W related to grounded aircraft over the past two years”. 

P&W is amidst a years-long recall of GTF engines for potential manufacturing defects, which has grounded hundreds of Airbus A320neos, A220s and Embraer E-Jet E2s worldwide.

Cirium fleet data shows leisure-focused airline Air Transat has seven A321neos listed as “in storage”, meaning they have been grounded for more than 30 days. The jets could be in storage for reasons beyond GTF engine inspections and repairs.

Transat has 12 A321LRs in service, according to Cirium. 

The carrier previously disclosed reaching terms with P&W for a compensation package but did not provide financial details at the time. 

While Transat’s quarterly results were largely positive, it failed to turn a profit for the full fiscal year 2024. It reports losing a total of C$114 million in the 12-month period, compared with a loss of C$25 million the prior year. 

Guerard says Transat expects the Canadian airline industry in 2025 ”to continue to favour a measured approach while maintaining relatively stable capacity”.

”The decline in inflation and interest rates also suggests an increase in consumers’ discretionary spending,” she says. “This situation should provide a suitable backdrop to deliver further yield improvements.” 

However, she alludes to “high economic uncertainty” and adds Transat is in discussions with stakeholders to “review all solutions to improve our capital structure”. 

The company recently boosted its balance sheet with sale-leaseback transactions covering four GTF engines from P&W, with three of the transactions closing before the end of fiscal 2024. The deals generated C$118 million of liquidity, Transat says.