Transat A.T. Inc., trading as Air Transat (TS, Montréal Trudeau), has secured a USD25 million (booked as CAD33.6 million Canadian dollars on October 31, 2024) compensation agreement from Pratt & Whitney to cover the costs of aircraft grounded in 2023 and 2024 due to problems with the geared turbofan (GTF) engines. The agreement, subject to certain conditions, covers the period from February 1, 2023, to December 31, 2024.

During a December 12, 2024, earnings call, Air Transat said it had six A321-200NX(LR)s out of service because of engine issues. However, the number of grounded aircraft has remained stable since the third quarter. Pratt & Whitney has also delivered two additional engines as part of the compensation package, which has prevented additional aircraft from going out of service.

Air Transat CFO Jean-Francois Pruneau clarified that a new compensation agreement will cover any aircraft still on the ground as of January 1, 2025. "It's not the end [of the compensation] as we still expect to have aircraft on the ground next year," he said. "We'll resume discussions with Pratt early next year, but we don't have any number on the table at the moment. Obviously, we want to get the maximum amount to cover the full cost of the aircraft on the ground, but it is a two-party negotiation."

During the 12 months to October 31, 2024, Air Transat took delivery of four new A321-200NX(LR)s and three A330-200s to make up for, among other things, the aircraft grounded due to the Pratt & Whitney GTF engine issue. However, the airline does not expect any aircraft deliveries in 2025.

As of October 31, 2024, Air Transat’s fleet consisted of fourteen A330-200s, two A330-300s, nineteen A321-200NX(LR)s, and eight A321-200s. Last week, the airline reported adjusted EBITDA of CAD123.3 million (USD86.2 million) for the fourth quarter. Pruneau says the result was primarily driven by higher traffic, lower fuel costs, and Pratt & Whitney's financial compensation package.