- Revenues of $537.2 million, an increase of 1.5% compared with 2003.
- Margin(1) of $16.9 million, compared with $4.8 million in 2003.
- Net income of $2.8 million or $0.06 per share (basic and fully diluted) compared with a net loss of $7.0 million or $0.24 per share (basic and fully diluted) in 2003.
- Cash and cash equivalents in the amount of $420.2 million (including $158.7 million held in trust or otherwise reserved) compared with $349.1 million (including $106.2 million held in trust or otherwise reserved) in 2003.
- Drop in total debt(2) levels by $11.2 million compared with total debt as at October 31, 2003.

Transat A.T. Inc., one of the 10 leading holiday travel companies in the world and the leader in Canada, recorded revenues of $537.2 million for the quarter ended January 31, 2004, compared with $529.1 million in 2003, an increase of 1.5%. The Corporation recorded a net income of $2.8 million for the quarter ($0.06 per share, basic and fully diluted), compared with a net loss of $7.0 million ($0.24 per share, basic and fully diluted) in 2003. "As we move forward and continue to deliver on our initiatives and restructuring efforts, we are on track to deliver our best winter season ever.

Although it is still early to have a clear vision on our summer season and despite certain markets being very competitive, booking trends are up over last year and our cost reduction efforts are on track as well" stated Jean- Marc Eustache, President and Chief Executive Officer of Transat A.T. Inc.

As at January 31, 2004 the Corporation had $420.2 million in cash and cash equivalents (including $158.7 million held in trust or otherwise reserved) compared with $349.1 million as at October 31, 2003 (including $106.2 million held in trust or otherwise reserved). Working capital was $139.7 million compared with working capital of $144.5 million as at October 31, 2003. Debt levels as of January 31, 2004 have decreased compared with October 31, 2003. The balance sheet debt dropped by $14.3 million to $51.1 million from $65.3 million and the off-balance sheet debt increased by $3.1 million from $529.9 million to $533.0 million resulting in a total debt reduction of $11.2 million compared with October 31, 2003. When deduction is made of cash and cash equivalents that are not in trust or otherwise reserved from total debt, the net debt(3) drops to $322.6 million from $352.3 million, an 8.4% decrease.

Geographic business areas highlights

Canada
In Canada, revenues increased due mostly to a 2.7% increase in the number of travellers when comparing the current quarter with the corresponding period in 2003 as well as higher prices. Increases were strong in all areas including destinations to the Caribbean, Europe and Florida.

The restructuring efforts undertaken in 2003 were felt in the current quarter. The consolidation of the Canadian tour operators and distribution activities resulting in a better management of airline seats and hotel rooms combined with a better utilization of the aircraft along with reduced expenses and increased demand have led to increased margins. For the quarter, margins increased to 5.8% compared with 3.2% in the corresponding quarter in 2003.

France and other
In Europe both revenues and expenses decreased in the current quarter compared with the corresponding period in 2003 resulting in similar negative margins.

Despite a 12.6% increase in the number of travellers, the Corporation's French operations recorded lower revenues and negative margins during the current quarter due to a 23% drop in passengers for air-only travel.

Long-haul travel from Europe to Caribbean destinations (travel packages) saw volumes increase compared with last year both at Vacances Air Transat (France) and Look Voyages. Air-only travel, however, saw significant decreases in volume and prices for Look Voyages. OutlookOverall, the Corporation expects a strong second quarter that combined with the first quarter results, could very well result in the best winter season ever for the Corporation due to the combination of demand and sustained cost reduction efforts.

In Canada, demand continues to be strong. The Ontario market continues to be competitive. However, the decision by the Corporation to cautiously manage capacity in this market combined with the consolidation initiatives undertaken in 2003 are delivering results.

In France, the Corporation continues to see good results with travel packages. Air-only travel bookings at Look Voyages, which are no longer core to its activities, are decreasing at a faster rate than originally expected. As a result, significant improvements for the next quarter in France are not expected.

With regards to the 2004 summer season, although it is still early, booking trends both in Canada and France are ahead of last year but there are pricing pressures in the UK market to Canada due to increased capacity and in certain other European destinations.

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, value-added services at travel destinations, as well as in distribution through travel agency networks. Transat is listed on the Toronto Stock Exchange (TSE:TRZ).

Non-GAAP measures
We prepare our financial statements in accordance with Canadian generally accepted accounting principles ("GAAP"). We will occasionally refer to non- GAAP financial measures in the news release. These non-GAAP financial measures do not have any meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other issuers. They are furnished to provide additional information and should not be considered as a substitute for measures of performance prepared in accordance with GAAP.

(1) Revenues less operating expenses (non-GAAP financial measure used by management as an indicator to evaluate ongoing and recurring operational performance).

(2) Debt plus off-balance sheet arrangements (non-GAAP financial measure used by management to assess the Corporation's future liquidity requirements).

(3) Total debt less cash and cash equivalents not in trust or otherwise reserved (non-GAAP financial measure used by management to assess its liquidity position).

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.

To view the results for the first quarter 2004, see Financial reports page.