- First quarter revenues reached $442.2 million, down 13.2% from the first quarter of 2001.
- The decrease is mainly attributable to a 27% drop in volume primarily due to the events of September 11.
- Transat recorded a net loss of $17.5 million for the quarter, or $0.54 per share.
- Cash and cash equivalents were $185.3 million at the end of the quarter.
- Transat strengthened its balance sheet through the issuance of debentures.

Transat A.T. Inc., one of the 10 leading tour operators in the world and the leader in the vacation travel industry in Canada, recorded revenues of $442.2 million for the first quarter ended January 31, 2002, a decrease of 13.2 % when compared with $509.6 million posted for the first quarter of 2001.

"As expected, the market has contracted after the events of September 11, resulting in a 27% drop in volume in the Canadian activities during the quarter," stated Jean-Marc Eustache, President and Chief Executive Officer of Transat A.T. Inc. at the Annual Meeting of Shareholders held in Montreal. "Despite a significant reduction in the product offering, the Corporation also had to reduce its sales prices, which had a negative impact on margins during the quarter. The relative strength of the U.S. dollar and the increase in costs also had an unfavourable impact on our performance, resulting in a net loss of $17.5 million ($0.54 per share), compared with a net loss of $0.6 million ($0.02 per share), for the corresponding quarter last year," he continued.

"These results are disappointing, but they were anticipated. As it is, they demonstrate the wisdom of the measures we announced and implemented in Canada last fall-measures aimed at adjusting our offerings to the prevailing market conditions by reducing our capacity by 25%. Booking volumes are gradually increasing. As we have said before, the decrease in total volume for the whole winter season is expected to be between 20% and 25% compared to last year for our Canadian activities. The decrease will be decidedly less pronounced in Europe, the source of one third of our revenues on an annual basis," he added.

On January 10, 2002, the Corporation and its subsidiary Air Transat issued non-convertible debentures for total proceeds in the amount of $21.9 million. These debentures are due January 2009. The debentures are redeemable starting in 2005 subject to the fulfillment of certain conditions. As part of this financing, the Corporation also issued 1,421,225 warrants enabling the purchase of Transat's shares at a price of $6.75, maturing in January 2007.

Finally, as at January 31, 2002, Transat had cash totalling $185.3 million (including cash held in trust). In addition, at the beginning of the second quarter, Transat issued $51.1 million principal amount of 9% unsecured subordinated convertible debentures due March 2007.

"Although we have had a difficult quarter and while significant challenges continue to arise, management is very proud of the performance of the whole organization, which continues to deliver a quality product," concluded Mr. Eustache.

About Transat A.T. Inc.
Transat A.T. Inc., with its head office in Montreal, is an integrated company specializing in the organization, marketing, and distribution of holiday travel. The core of its business consists of tour operators in Canada and France. Transat is also involved in air transportation, hotel management, and value-added services offered at travel destinations as well as in distribution through both travel agency networks and e-commerce initiatives. Transat A.T. Inc. is a public corporation listed on the Toronto Stock Exchange (TSE : TRZ). In 2001, Transat recorded revenues of more than $2 billion.