- Revenues of $499.1 million for the third quarter and $1.7 billion for the first nine months of 2004.

- Margins(1) of $28.1 million for the third quarter and $124.4 million for the first nine months of 2004, increases of $25.6 million and $76.6 million respectively compared with 2003.

- Net income of $12.8 million for the third quarter or $0.31 per share fully diluted compared with a net loss of $10.1 million or $0.33 per share fully diluted in 2003.

- Net income of $61.1 million for the first nine months of fiscal 2004 or $1.49 per share fully diluted compared with a net loss of $1.7 million or $0.13 per share fully diluted in 2003.

- Cash and cash equivalents in the amount of $491.0 million (including $122.3 million held in trust or otherwise reserved) compared with $349.1 million (including $106.2 million held in trust or otherwise reserved) as at October 31, 2003. Transat A.T. Inc., one of the most important holiday travel companies in the world and the leader in Canada, recorded revenues of $499.1 million for the quarter ended July 31, 2004 compared with $444.1 million in 2003, an increase of 12.4%. The Corporation recorded a margin of $28.1 million for the quarter, compared with $2.5 million in the corresponding quarter of 2003.

Net income was $12.8 million or $0.31 per share on a fully diluted basis for the quarter compared with a net loss of $10.1 million or $0.33 per share on a fully diluted basis for the corresponding quarter of 2003. Excluding the after-tax effect of the restructuring charge in 2003, the net loss of the corresponding quarter in 2003 was $5.8 million or $0.20 per share on a fully diluted basis.

"Our summer season has gotten off to a very positive start with volumes bouncing back to pre-SARS levels. In Canada, our new structure and ongoing efforts to control costs and be efficient played a central role in improving our margins. In France, we are in the final phase of our plan to reorganize and reposition Look Voyages and bring it back to profitability in the latter part of fiscal 2006" stated Jean-Marc Eustache, President and Chief Executive Officer of Transat A.T. Inc.

For the first nine months of fiscal 2004, Transat recorded revenues of $1,733 million compared with $1,692 million in 2003, an increase of 2.4%. The Corporation recorded a margin of $124.4 million for the first nine months of fiscal 2004 compared with $47.8 million recorded in 2003. Net income was $61.1 million or $1.49 per share on a fully diluted basis for the period compared with a net loss of $1.7 million or $0.13 per share on a fully diluted basis for the corresponding period of 2003 ($5.2 million of net income or $0.08 per share on a fully diluted basis excluding the after-tax effect of the restructuring charge).

Included in the margins as a reduction in operating expenses is a $6.2 million ($4.6 US million) or $3.9 million after-tax amount paid to the Corporation in August, 2004 for the settlement of litigation it was party to through the Air Transport Association of Canada against the United States government. The litigation related to fees paid pursuant to U.S. regulations which were subsequently deemed to be null and void by the U.S. courts. The settlement was reached in July 2004. Excluding the $3.9 million after-tax settlement, net income for the current quarter was $8.9 million or $0.21 per share and $57.2 million or $1.40 per share for the first nine months of fiscal 2004.

As at July 31, 2004 the Corporation had $491.0 million in cash and cash equivalents (including $122.3 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 $213.8 million compared with working capital of $144.5 million as at October 31, 2003.

Debt levels as at July 31, 2004 have decreased compared with October 31, 2003. The balance sheet debt dropped by $34.0 million to $31.3 million from $65.3 million and the off-balance sheet debt decreased by $8.9 million from $529.9 million to $521.0 million resulting in a total debt(2) reduction of $42.9 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 $183.7 million from $352.3 million, a 47.9% decrease. Geographic business areas highlights

Canada
In Canada, revenues increased by 22.6% in the current quarter and 6.5% in the first nine months of fiscal 2004 compared with the corresponding periods in 2003. These increases are due to an increase in the number of travellers by 22.4% and 9.4% respectively compared with the corresponding periods in 2003 and the additional revenues generated by the recent acquisition of Jonview ($17.7 million for the quarter and $18.6 million for the first nine months) partially offset by a reduction in sales made to external tour operators (i.e. tour operators outside the Transat group of companies). The corresponding periods included a reduced number of travellers due to the impact of SARS and the Corporation did not generate any revenues from Americanada in fiscal 2004. In fiscal 2003 Transat recorded $20.6 million of revenues during the first six months. Demand increased for all European destinations, especially the United Kingdom, France, Germany and the Netherlands. Overall prices, however, have not returned to pre SARS levels.

For the quarter, margins increased to 9.1% (7.3% excluding the $6.2 million settlement) compared with 2.2% in the corresponding quarter of 2003 and for the first nine months of fiscal 2004 the margins increased to 10.5% (10.0% excluding the $6.2 million settlement) compared with 4.8% in the corresponding period in 2003.

France and other
On July 13, 2004 the Corporation announced the implementation of a plan to return Look Voyages to profitability. The plan calls for a reorganization including the abandonment of its air-only operations, which could result in staff reductions affecting about 90 people. The plan also calls for the intensified development of the core holiday package business along with the increased use of Internet technologies to stimulate sales to both travel agencies and the general public.

Transat has entered into negotiations with regulatory authorities in France which have not been finalized. As a result Transat is not in a position to disclose the amounts associated with this plan. However, it does not expect these amounts to exceed $19.0 million of which a maximum of $11.0 million would be in cash. The plan is expected to positively affect the 2005 results however. Information on anticipated annual savings and expenses related to the reorganization will be disclosed along with the fourth quarter and year-end results in January 2005.

In Europe both revenues and expenses decreased both in the current quarter and in the current nine-month period compared with the corresponding periods in 2003.

Despite increases in the number of travellers in both the current quarter and nine month period by 14.6% and 11.4% respectively, Transat's French operations recorded lower revenues and negative margins due to a drop in passengers for air-only travel at Look Voyages of approximately 45.5% and 32.0% respectively (tour operators record round-trips in terms of travellers and airlines record flight segments in terms of passengers). This drop in revenues was partially offset by the inclusion of Tourgreece's revenues as of June 10, 2004 in the amount of $4.5 million. The corresponding periods included a reduced number of travellers due to the impact of SARS.

The increase in travellers for the current quarter was mostly due to increased demand for long-haul travel from Europe to Caribbean destinations and to the U.S. at Vacances Transat (France) and to destinations in the Mediterranean Basin at Look Voyages at lower overall prices. The lower prices are the result of competitive pressure.

The increase in travellers for the current nine-month period was mostly due to increased demand for long-haul travel from Europe to the Caribbean at Vacances Transat (France) and to the Mediterranean Basin at Look Voyages at lower overall prices. AcquisitionsOn June 10, 2004 the Corporation acquired an additional 50% participation in Tourgreece S.A. ("Tourgreece"), an incoming tour operator, for a total consideration of $3.0 million (1.8 million euros) in cash. Pursuant to this transaction, the Corporation held a 90% interest in Tourgreece.

On April 8, 2004 the Corporation completed the acquisition of the remaining 50% participation in Jonview Corporation ("Jonview"), an incoming tour operator, in partnership with the Solidarity Fund QFL (a minority shareholder of Jonview) for $12.8 million. The Corporation's percentage ownership in Jonview is 80.07% as a result of this transaction. AppointmentOn August 24, 2004 the Corporation announced the appointment of Nelson Gentiletti to the newly created position of Executive Vice-President, Transat Tours Canada (TTC). Mr. Gentiletti will also remain in his current function of Vice-President, Finance & Administration, and Chief Financial Officer until a successor is appointed. OutlookIn Canada European booking levels for the fourth quarter thus far are back to the levels of 2002 and overall bookings are up by approximately 13% compared with 2003. Prices however are not yet back to 2002 levels. The Corporation expects the remainder of the fourth quarter to follow this trend.

The Corporation expects the pricing environment to continue to be as challenging as it has been over the summer season thus far as booking cycles continue to be short at 1 to 6 weeks prior to departure. The Corporation will also continue to feel the impact of the recent surge in fuel prices which will only be partially offset by its hedging program, fuel surcharges and the favorable impact of the stronger Canadian dollar.

In France the Corporation does not expect improvements in Look Voyages' results in the fourth quarter. However, with the announcement of its plan to reorganize and reposition Look Voyages, its losses are expected to decrease by approximately 50% in fiscal 2005 and a return to profitability is expected by the end of fiscal 2006. As a result of these continued losses the Corporation will no longer be recording any income tax recovery related to its French operations beginning in the fourth quarter. Transat expects to record the restructuring charge related to Look Voyages in the fourth quarter as well. The amount of the restructuring charge is not expected to exceed $19.0 million, of which a maximum of $11.0 million would be in cash.

The French operations in the fourth quarter will also be impacted by the fact that the Corporation is no longer using the equity method in accounting for its investment in its French airline company as of February 1, 2004. In the fourth quarter of 2003, the Corporation recorded an equity pick up of $3.4 million from Star Airlines.

Transat's fourth quarter outlook is in line with the guidance given at the end of the second quarter. In conclusion, the Corporation expects to end the fiscal year with a good summer that, combined with the exceptional winter season it just went through, is expected to result in a record year.

Transat began the year with a strategy designed to focus on its core business, reduce its costs and improve its margins. Its recent performance and expected performance in the fourth quarter will clearly demonstrate that it has delivered on this strategy. Transat is now well positioned to invest in its future and grow the company.

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 measuresWe 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 statementsThis 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.

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