Canadian airline Air Transat faced a net loss of $106.6 million in its third fiscal quarter, which ended on July 31, 2026. This downturn was primarily due to soaring aviation fuel prices and the indefinite suspension of its flights to Cuba.
The cancellation of flights to Cuban airports alone led to a $35 million deficit for Air Transat in that quarter. This contrasts sharply with the $399.8 million profit the parent company, Transat AT, reported for the same period in 2025. The latest figures indicate a loss of $2.60 per share, compared to earnings of $9.97 per share the previous year.
The surge in aviation kerosene prices, which climbed by 56% year-over-year, added an extra $105 million in expenses during the quarter.
“The sustained increase in fuel prices, which far exceeded our forecasts, was the primary reason for our declining profitability in the third quarter,” stated Annick Guérard, President and CEO of Transat AT. She emphasized that even with increased operational capacity driving revenue growth, “competitive market conditions limited our ability to pass on the higher fuel costs to customers,” thereby reducing occupancy rates and unit revenue per passenger.
The company estimates that the cumulative impact of the fuel crisis—triggered by the conflict in Iran that began in February 2026—has already reached around $175 million.
The Collapse of the Cuban Market
Air Transat halted all flights to Cuba in February 2026 after the island's airports ran out of Jet A-1 fuel. In June, this suspension was extended indefinitely, alongside similar measures by Air Canada and WestJet.
For the nine-month fiscal period, the absence from the Cuban market has resulted in a $116 million revenue shortfall for the airline.
The decline in Canadian tourism to Cuba has been catastrophic. Only 125,444 Canadian tourists visited Cuba between January and April 2026, a sharp drop from 346,109 during the same months in 2025, marking a decrease of 63.8%.
Overall, Cuba welcomed just 419,863 visitors from January to July 2026, a 63% year-on-year decline. This downturn has left 73% of the country's hotels shuttered.
In a bid to maintain liquidity, the Canadian federal government announced on Thursday a new $250 million loan through the Canada Emergency Business Support Corporation, supplementing the $150 million already provided by the same body in June.
Guérard expressed gratitude for the support, noting that the assistance “provides additional financial liquidity and flexibility to navigate this challenging situation.”
Impact of Air Transat's Suspension of Flights to Cuba
Why did Air Transat suspend flights to Cuba?
Air Transat suspended flights to Cuba because the island's airports ran out of Jet A-1 fuel, making it impossible to continue operations.
How did the suspension affect Air Transat financially?
The suspension of flights to Cuba cost Air Transat $35 million in the third quarter alone, contributing significantly to the company's overall financial losses.
What impact did the fuel crisis have on Air Transat?
The ongoing fuel crisis, exacerbated by the conflict in Iran, led to a substantial increase in aviation fuel prices, costing Air Transat an additional $105 million in the third quarter and accumulating a total impact of $175 million.