Transat A.T. Inc. shows sustained growth in 2000: Revenues approach $2 billion Earnings increase 22%

Montreal, January 17, 2001


-Revenues reached $1.9 billion, an increase of 18.4%
-Net income was $36.6 million, an increase of 22.0%
-Earnings per share rose from $0.89 to $1.14, an increase of 28.1%
-Return on shareholders’ equity reached 16.8%
-Sales volumes increased both in Canada and in France
-The Corporation energetically pursued its vertical integration strategy

Transat A.T. Inc., the leader in Canada’s holiday travel industry, recorded net income of $36.6 million, or $1.14 per share, for the year ended October 31, 2000 compared with net income of $30.0 million, or $0.89 per share, for the year ended October 31 1999 an increase of 28.1% in earnings per share.

The Corporation’s revenues reached $1,922.6 million compared with $1,623.3 million in 1999, an increase of 18.4%.

“We recorded a significant increase in business activity both in Canada and in France; an increase that is mainly the result of internal growth due to, among other things, a sharp increase in sales volumes,” stated Jean-Marc Eustache, President and Chief Executive Officer of Transat A.T. “Had it not been for the weakness of the euro, our revenues would have passed the $2 billion mark,” he added. “Transat is in an excellent strategic and financial position to forge ahead and become a major force in North America and in Europe. Despite the impact of high fuel prices on our results, we maintained excellent profitability and produced a return on shareholders’ equity of 16.8%,” he concluded.

Highlights for the fiscal year
In Canada, there was growth in all regions, but this growth was decidedly more evident in Ontario and in Western Canada, where the Transat group successfully pursued its development. In general, the first six months of 2000—the winter season during which consumers prefer sunshine destinations—showed higher increases in revenues than the second half of the fiscal year—the summer season, during which consumers opt for European destinations.

For the year, growth in revenues was the result of both higher volumes and price increases, the latter, in part due to the increase in fuel costs. The Transat group also recorded higher sales volumes and prices in France. Nevertheless, the growth in revenues in Canadian dollars attributable to the French market was only 4% due to the decline in value of the euro.

In short, the Corporation’s profitability increased, especially thanks to sales volumes that rose in highly competitive markets, and to a Canadian dollar that was stronger than it was during the previous fiscal period. This increase was, however, reduced by spiraling fuel costs and an increase in operating expenses.

During the fiscal year, Transat spent some $88 million on investing activities compared with $28.4 million in 1999. These investments were mainly related to Air Transat’s fleet renewal program, as well as to the acquisition of companies, to e-commerce, and to an investment in a joint venture.In fiscal 2000, Transat took a giant step in e-commerce.

In France, after successfully penetrating the market in 1999,, a true online travel agency doubled its sales in 2000. This transactional site holds promise as a key tool in the penetration of new geographical markets in Europe. In Canada, Exit Travel developed and launched a unique transactional Web site,, which provides access to the most comprehensive collection of vacation packages and of charter flights for departures from Canada. Consequently, consumers have round-the-clock access to their travel agency, 7 days a week.

During the fiscal year, Transat energetically pursued acquisitions as part of its vertical integration strategy. With regard to outgoing tour operators, the Transat group acquired Americanada, an à la carte specialist, and the remaining 61% of the shares of Brok’Air, making it a wholly owned subsidiary on the French market. The group also consolidated its control of Consultour in Canada, of Euro Charter S.A. in France, and of Handlex—it now holds a 100% interest in all three.

As well, shortly after the end of the fiscal year, Transat announced that it is acquiring 50% of Jonview, the leading incoming tour operator in Canada, with sales of $100 million.

Transat A.T. Inc., the leader in the Canadian tourism industry, is a public corporation listed on the Toronto Stock Exchange. Through its subsidiaries and affiliated companies, it is active in all aspects of the organization and distribution of travel services as well as in charter air transportation. A

ir Transat is an air carrier and is a wholly owned subsidiary, as are Air Transat Holidays (Montreal, Quebec City, Toronto, Vancouver, and Fort Lauderdale); Vacances Air Transat (France); Brok’Air (France); Voyages Nolitour (Montreal); Regent Holidays (Toronto), and Americanada Tours International (Montreal), which are tour operators; Tourbec, a travel agency chain; the Consultour/Club Voyages agency networks; Handlex, an airport service handling company; Exit Travel and Anyway, in retail e-commerce; and Cameleon, a hotel management company. Transat A.T. Inc. holds an interest in tour operators Look Voyages (99%) and World of Vacations (35%).

In addition, Air Transat Holidays holds an interest in the incoming tour operator DMC Transat (66.7%), and Look Voyages holds an interest in STAR Airlines (49.6%).