-Transat delivers solid results; restructuring program on track

-Revenues for the second quarter increased by $95.6 million or 15.3% compared with the corresponding quarter in 2002.

-Restructuring charge of $2.6 million after-tax taken during the quarter.

-Net income for the second quarter increased by $2.5 million (excluding the after-tax restructuring charge).

-Revenues for the first six months of fiscal 2003 (winter season) increased by $182.4 million or 17.1% compared with the corresponding period in 2002.

-Net income for the winter season increased by $12.4 million (excluding the after-tax restructuring charge).

-Solid financial position with $298.8 million in cash and cash equivalents as at April 30, 2003 (including $62.0 million held in trust or otherwise reserved).

Transat A.T. Inc., one of the 10 leading leisure travel companies in the world and the leader in Canada, recorded revenues of $718.8 million for the second quarter ended April, 2003, an increase of $95.6 million or over 15% compared with revenues of $623.3 million in the corresponding quarter of 2002. The Corporation recorded a net income of $15.4 million for the quarter ($0.45 per share), compared with a net income of $15.5 million ($0.46 per share) in the corresponding quarter of 2002. The Corporation also recorded a $3.7 million restructuring charge ($2.6 million after-tax) related to some of the recently announced reorganizations in Canada. Excluding the effect of the $2.6 million after-tax restructuring charge, the Corporation recorded a net income of $18.0 million ($0.52 per share) in the current quarter.

“The results of the quarter were better than our 2002 second quarter results despite the war in Iraq and the economic situation in Europe. In Canada and in France we delivered on some of the objectives we set out to accomplish for fiscal 2003. We announced the reorganization of our Canadian tour operator Americanada and of our French subsidiary Look Voyages that resulted in the planned elimination of some 240 positions. Additionally, after the end of the quarter we announced further staff reductions of approximately 500 employees in our airline subsidiary and other Canadian tour operators. The slowdown in demand in the tourism industry as a whole due to the war in Iraq, continued terrorist threats, and the negative impact of SARS led us to continue to reorganize our operations and reduce our costs. Although we have not finalized our reorganizations, we expect significant cost savings as a result of the measures we have already undertaken to occur in fiscal 2003.

As we previously announced, the reorganization of Americanada alone is expected to result in annual before-tax savings of approximately $6.0 million,” stated Jean-Marc Eustache, President and Chief Executive Officer of Transat A.T. Inc. “Despite our overall improvement, however, Transat remains cautious and continues to be committed to managing very conservatively and to actively pursuing organizational and operational initiatives that will have a positive impact on the bottom line. However, we have not altered our prediction that 2003 would be a very challenging year. Today, SARS is at the forefront of travellers’ minds.

SARS has had a significantly negative impact at a very crucial time. The Canada-Europe market is a critical part of our summer season and the bookings for our summer season have been negatively impacted for the third quarter. We do however see some improving trends for the fourth quarter but remain cautious. In France, the economic situation has not improved and we do not expect to see any improvements in that market for the remainder of the year. We expect Look Voyages to experience a particularly difficult time.

”For the first six months of fiscal 2003 (known as the winter season), the Corporation recorded revenues of $1,248 million, an increase of $182,4 million or over 17% compared with revenues of $1,065 million in the corresponding period of 2002. The Corporation recorded net income of $8.4 million for the winter season ($0.21 per share), compared with a net loss of $1.5 million ($0.06 per share) in the corresponding season of 2002.

Excluding the effect of the $2.6 million after-tax restructuring charge, the Corporation recorded net income of $11.0 million ($0.29 per share).For the quarter, $3.7 million was recorded as a pre-tax restructuring charge related to Canada. The Corporation has entered into negotiations with regulatory authorities in France. The negotiations have not been finalized. As a result, the Corporation is not in a position to disclose the amounts associated with this plan. No charge has yet been accrued relating to the French operations as part of our restructuring charge. These amounts will be disclosed in the next quarter.

The Corporation’s cash position continues to do well due to a more efficient cash management and the seasonal nature of our operations. As at April 30, 2003, the Corporation had $298.8 million in cash and cash equivalents, including $62.0 million held in trust or otherwise reserved, compared with $260.1 million as at October 31, 2002 (including $101.3 million held in trust or otherwise reserved).

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 is in Canada and France. Transat is also involved in air transportation, value-added services offered at travel destinations and distribution through travel agency networks. Transat is listed on the Toronto Stock Exchange (TSE:TRZ).

Forward-looking statements
This news release contains certain forward-looking statements with respect to the Corporation. These forward-looking statements, by their nature, necessarily involve risks and uncertainties that could cause actual results to differ materially from those contemplated by these forward-looking statements. The Corporation considers the assumptions on which these forward-looking statements are based to be reasonable, but cautions the reader that these assumptions regarding future events, many of which are beyond its control, may ultimately prove to be incorrect since they are subject to risks and uncertainties that affect the Corporation.

For additional information with respect to these and other factors, see the Annual Information Form and Annual Report (Management Discussion and Analysis) filed with Canadian securities commissions. The Corporation disclaims any intention or obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.