Péladeau fails to seize control of Transat board as shareholders reject bid

A traveller walks past an Air Transat logo in departures at Montreal-Pierre Elliott Trudeau International Airport in Montreal. THE CANADIAN PRESS/Christinne Muschi

MONTREAL — Transat A.T. Inc. shareholders rejected media magnate Pierre Karl Peladeau’s bid to seize effective control of the company’s board on Tuesday, opting instead to stay the course.

At the travel company’s annual meeting in downtown Montreal, the Quebecor CEO proved unable to convince fellow shareholders to back his proposal to install himself and two associates on a slimmed-down board where they would comprise half of the directors.

Peladeau, whose investment firm Financiere Outremont Inc. holds the second-largest stake in Transat at 9.5 per cent, called in December for an overhaul as well as a strategic review that put management in its sights. He demanded the company restructure its “broken” balance sheet following a five-year share price decline that exceeded 50 per cent.

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His two other nominees were pollster and economist Jean-Marc Leger and Quebecor vice-chair Andre Brosseau.

By March, the odds were stacked against the trio after leading proxy advisers Glass Lewis and Institutional Shareholder Services as well as the Fonds de solidarite FTQ and the Caisse de depot et placement -- Quebec fund managers that combined hold 16 per cent of Transat -- came out in favour of its rival slate of directors.

Daniel Desjardins, re-elected to the board on Tuesday, said in a statement the vast majority of retail shareholders voted in favour of the company’s plan.

“This outcome delivers the necessary stability, experience and oversight for Transat to complete its multi-year transformation and move to the next phase of its strategy to drive profitable growth,” said Desjardins, a director since 2022 and a lawyer with decades of experience in aviation.

The precise results of the vote are expected later in the day.

Transat may have won its showdown with Peladeau, who attended the shareholder meeting Tuesday, but the company still faces challenges.

It reported Tuesday tens of millions of dollars in losses in its latest quarter amid stiff competition for vacation destinations and a big debt burden, even as it beat earnings expectations.

The company, which sells vacation packages and flights largely to spots in Europe and the Caribbean, lost $29.5 million in the three months ended Jan. 31, versus losses of $122.5 million during the same period a year earlier.

Bright spots included higher passenger traffic that boosted first-quarter revenues by five per cent year-over-year to $870.7 million. Yield -- a metric gauging the average revenue an airline garners per paying passenger for each mile flown -- also ticked up.

“Overall, our achievements demonstrate that Transat is moving in the right direction in laying the foundation for long-term shareholder value creation,” said chief executive Annick Guerard in a news release.

The company has seen revenues hit by trip disruptions in Jamaica caused by Hurricane Melissa in October as well as costs related to an ongoing recall of Pratt & Whitney turbofans that continues to ground between three and five of Air Transat’s 40-odd jets.

Last month, it suspended all flights to Cuba through the end of April after the United States blocked oil tankers heading to the island from Venezuela, sparking a fuel shortage.

National Bank analyst Cameron Doerksen predicted “year-over-year profitability” in 2026, but also highlighted continuing issues.

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“We have some concerns about a more competitive environment in the coming quarters, and this winter is facing some additional headwinds due to the cessation of flights to Cuba and a recent spike in jet fuel prices” -- set off by the U.S.-Israeli war with Iran -- he said in a note to investors.

Transat forecast that capacity will grow between five and seven per cent this year, slightly below prior expectations of six to eight per cent.

On an adjusted basis, the Montreal-based company said it lost $1.18 per share in its latest quarter compared with an adjusted loss of $1.90 per share a year earlier.

Peladeau, a vocal presence in the world of Quebec business, has long had his eye on Transat and criticized its leadership before, most recently in 2021 after his bids to buy the tour operator failed.

“Owning an airline seems to be very cool stuff. It seems to appeal to egos to some degree,” said Karl Moore, associate professor at McGill University’s Desautels Faculty of Management.

Despite recent struggles at Transat, the business case for legacy leisure airlines remains as well.

“People travel a lot. We have winter so we like to go south,” Moore said.

“It’s an attractive market compared to Europe, where there’s a lot of competition, a lot of government involvement, and the U.S. where it’s a great market but there’s a lot of competition.”

Peladeau made an unsolicited offer of $5 per share for Transat in December 2020 after shareholders voted in favour of an identically priced bid from Air Canada that amounted to $189 million. Air Canada eventually called off the would-be merger in April 2021 after European regulators signalled they would not approve the acquisition.

This report by The Canadian Press was first published March 10, 2026.