Warning concerning information circulating on the Web

Transat wishes to advise the media that it in no way ensures the accuracy and completeness of information circulating on the Web about the company, including its business units, particularly on sites such as Wikipedia. The way these sites are operated, as well as the multitude of people able to change their content, have led, and will continue to lead, to information quality problems. Transat posts background information on its own website and has a media service available for journalists.

Following are clarifications that Transat considers to be important. It should not be assumed, however, that an article or report that does not appear in this section contains only accurate information and the company makes no commitment to correct all inaccuracies.

2012-12-19 - Comment on a Gazette story of December 19, 2012

A story in this morning’s Gazette propagates anonymous comments whose essence is unfounded. Even though the journalist published the company’s denials, Transat regrets the dissemination of totally erroneous information. In light of the above, Transat has issued press releases this morning establishing the facts. Transat announced this morning that it had a very profitable summer.

2012-11-13 - Erroneous information and speculation in

On November 12, the French online magazine published erroneous information and speculation about Transat, without attempting to check the facts beforehand. Transat is disappointed with the use of conditional tenses and question marks, the obvious outcome of which is to propagate rumours, in an article titled “ Transat France vers un plan social avec la mise en commun des équipes? ” Transat therefore wishes to clarify the facts regarding a plan to merge Transat France business units in one single legal entity, which was presented to the firm’s comité d’entreprise on October 26, 2012.

The said merger of Transat entities in France has numerous advantages, mainly a simplification of financial administration. A reorganization of business units and an amalgamation of some departments could follow. However, contrary to’sspeculations, no “plan social” is planned and no meeting of the comité d’entreprise is scheduled on November 15, 2012. Management of Transat France will provide more details about this plan in late November.

Transat France has asked’s newsroom to correct the published story. A clarification has been sent to all professional media in France.

As stipulated in the Charte d’éthique professionnelle des journalistes, journalists should exercise the utmost vigilance before disseminating information, and the failure to check the facts constitutes a serious departure from professional performance.

2012-11-13 - Clarification regarding a story in The Globe and Mail on October 18, 2012

On October 18, 2012, The Globe and Mail daily newspaper published a story headlined “Beware: Transat faces more turbulence,” which was erroneous.

At Transat’s request, the Globe and Mail published a clarification on-line on October 23, which was updated on October 29.

The following letter was sent to the Globe and Mail’s public editor on November 7, 2012.

Montreal, November 7, 2012.

Ms. Sylvia Stead,
Public Editor,
The Globe and Mail

By email at

Dear Ms. Stead,

I am writing in reference to an article by David Milstead published in The Globe and Mail on October 18, 2012, headlined Beware: Transat faces more turbulence. The article occupied approximately half of Page B16. A “clarification” was published online on October 23. It was updated on October 29.

The initial story contained a major factual error that Mr. Milstead readily acknowledged when contacted by us. In essence, Mr. Milstead had calculated a ratio of 11.25 when dividing enterprise value (including off-balance-sheet aircraft leases, as he explains) by EBITDA (earnings before interest, taxes, depreciation, and amortization), and concluded that the company’s stock price was less attractive than it seemed. Hence the dark tone of the headline.

The problem was that Mr. Milstead’s calculation was flawed. It should have included aircraft rents in the denominator. As he says in his clarification: “How much difference does it make? A lot.” And he then explains that the ratio of enterprise value to EBITDAR(the “R” standing for “Rents”) comes out at 3.0, not his original 11.25.

In his original clarification of October 23, Mr. Milstead, as we said, readily recognized the problem, and even spoke of “multiple malpractice on my part,” quite a strong statement for an error obviously made in good faith, and we thank him for his openness. That said, in that clarification, Mr. Milstead continued to present his calculation as legitimate when he qualified the proper ratio (the one including aircraft rents) as an “alternative” valuation to “his” approach. He erroneously backed this position with comments from financial analyst Ben Vendittelli. We suggested that Mr. Vendittelli call Mr. Milstead, which he did. Mr. Vendittelli confirmed that aircraft rents simply cannot be ignored. Mr. Milstead’s original approach is indeed not viable, and the ratio of reference, including aircraft rents, is not an “alternative”. Mr. Vendittelli’s comments were then “unpublished” from the clarification, but the idea of an “alternative” ratio remained in the headline. We contacted Mr. Milstead again on November 1 to ask for the headline to be corrected.

As of November 7, as we address this letter to you, the headline stands incorrect and unchanged, the nature of the update of October 29 remains absent and content was unpublished, all of this being in breach with journalism standards. The Canadian Association of Journalists says: “When we make a mistake, whether in fact or in context, and regardless of the platform, we correct it promptly and in a transparent manner, acknowledging the nature of the error. We publish or broadcast all corrections, clarifications or apologies in a consistent way. We generally do not “unpublish” or remove digital content...”

We would respectfully like to make the following comments.

The Globe and Mail’s Report on Business is a very credible news medium that has a solid and well-deserved following among investors. The original article of October 18, essentially conveying that Transat stock may present risks that are not reflected in its price, or are not well understood by the market, may have had, or may still have, consequences. Did some investors sell? Did others refrain from buying? How many retail brokers or investors marked a little dark cloud above our company? We will never know. But we know for a fact that one of our competitors was quick to tweet a link to Mr. Milstead’s original article to who knows how many people, all of whom will never be advised of the clarification(s) and may have re-tweeted the link. The mention in the paper of a clarification, tiny and inconsequential as it was, and the subsequent versions of the online-only, incomplete clarification, do not even come close to rectifying the problem caused by the original article, prominently displayed with photo and headline.

Our paramount point, in the circumstances, is to deplore the disappearance of fact-checking as standard procedure in journalism.

In this case, we contend that the error, obviously made in good faith, was nevertheless significant, that the original headline was damaging, with possible financial consequences, and we believe there should have been a call made to us in advance of publication to check the facts. Like many large corporations, we have a full-time media officer available, exactly for cases like this. A call from The Globe and Mail would have been returned quickly. Readers would have been better served, and our reputation would have emerged intact.

Please note that this letter will be posted on our website for the benefit of our shareholders.

Best regards,

Michel Lemay
Vice-President, Communications and Corporate Affairs
Transat A.T. Inc.

2012-09-17 - Clarification regarding September 14, 2012, article in La Presse

We wish to issue a clarification regarding information about Transat published in an article in the business section of La Presse on September 14, 2012.

The article suggested that Transat would be reducing capacity for winter 2012 by 10% on its transatlantic routes and by 17% on Sun destination routes. In fact, as the press release issued by Transat on September 13, 2012, clearly states, these numbers apply only to the fourth quarter; i.e., the months of August, September and October 2012.

The article should have stated that Transat is reducing capacity on Sun routes by 7% this winter, as mentioned during the conference call that accompanied the release of the company’s third-quarter results.

At our request, La Presse corrected the error in its September 15, 2012, edition. We thank the newspaper for doing so.

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