Transat A.T. Inc. announces a reduction in certain operations

Montreal, May 5, 2003

Transat A.T. Inc, an integrated company specializing in the organization, marketing, and distribution of holiday travel, today announced measures to adjust to the slowdown in demand in the tourism industry as a whole due to the international situation and to the negative impact of SARS.

"For almost two years now, the tourism industry has been going through a very difficult period," stated Jean-Marc Eustache, President and Chief Executive Officer of Transat A.T. Inc. "The war in Iraq and SARS have added to these difficult circumstances, forcing Transat to adopt difficult but essential measures in response to the prevailing slowdown," he added.

Transat today announced staff cuts of about 100 at Canadian tour operators Air Transat Holidays and Nolitour/World of Vacations.

The slowdown in demand experienced by these tour operators and market conditions in Europe have repercussions on Air Transat, the group’s airline, translating into a decrease of about 15% in air capacity in place for the summer season, in turn resulting in the lay-off of some 400 people at Air Transat."Today, we are making a difficult announcement. I sincerely thank all of our employees for their support and their valuable contribution to our company, " stated Mr. Eustache.

"Transat is financially sound, and has sufficient cash flow to meet the challenges facing the travel industry. Our tour operators and our airline are in a good position to take advantage of the market’s recovery. International tourism has been steadily growing for more than 50 years, demonstrating its ability to recover. It remains one of the world’s leading export sectors," concluded Mr. Eustache.

About Transat A.T. Inc.
Transat A.T. Inc., with its head office 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).

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