Transat A.T. Inc. (TRZ) Earnings Call Transcript & Summary

Good morning, everyone. Welcome to the Transat Shareholders Annual and Special Meeting. This meeting will be taking place in French, simultaneous translation will be available into English. My name is Susan Kudzman, Chairperson of the Transat Board of Directors. I'd like to thank warmly the shareholders, employees and other invitees who have joined us virtually in order to participate in this annual and special shareholders assembly. Allow me to introduce the persons who are participating and will be co-moderating this assembly with me. Annick Guerard, CEO and a Board member of Transat, Jean-Francois Pruneau, Chief Financial Officer; Bernard Bussieres, Head of Legal and Government Relations, Corporate Secretary for Transat, who compliant with our rules will act as Secretary for this assembly. And we have Andrean Gagne, Senior Director of Communications and Public Affairs. I'd like to point out as well the virtual presence of my fellow administrators, directors on the Board, Ms. Genevieve Broullette, Ms. Lucie Chabot, Ms. Valerie Chort, Mr. Robert Coallier, Daniel Desjardins, Stephane Lefebvre, Bruno Matheu, Ian Rae and Ms. Julie Tremblay. In compliance with the bylaws of our corporation and as Chairperson, I will preside this assembly. Firstly, I'd like to request that the Secretary make a few comments on how the assembly will unfold. Bernard?

Thank you, Madam Chair. Good morning. Once again, for purposes of efficiency, the Board has chosen to hold this assembly in a virtual fashion using a webcast. We've taken care to ensure that the proceedings will be compliant with best practices, and it will respect all shareholder rights. All shareholders who are registered and proxies can participate online and can ask questions, vote and live questions can be submitted in writing or by phone in French or in English as the assembly unfolds. [Operator Instructions] In order to be able to make sure that the assembly unfolds correctly, we will answer questions towards the end of the assembly. Note that Questions sent via the online platform will be read by the moderator before being submitted in order to avoid repetition and overlaps and avoid questions that are not pertinent in this context or of no interest for shareholders. Only shareholders and their proxies can ask and submit questions regarding your right to exercise your vote. If you've already voted or if you sent a proxy, your vote has been recorded, you don't have to vote again. Please note that if you do vote again, your initial vote will be canceled and only the vote you cast during the assembly will be counted. When it will become time to vote on the 6 proposals, an icon for vote will be appear in your navigation bar at the top of your screen. The resolutions and the voting choices will appear and when you will proceed on the vote, a message confirming that your vote has been received will appear on your screen. It's possible to change a vote that you've submitted before, and you'll be able to vote until the voting session is declared closed. The chairperson will advise you at the opportune moment. Final results will be announced at the end of the assembly and will be published on SEDAR+ in compliance with the applicable regulations. Proposals who will be presented during the assembly are described in the solicitation circular and at the link appearing on the screen as well as SEDAR+ under the corporation's profile. The circular is also available on Transat's website. Proposals will be presented and then supported following the agenda for today.

Thank you, Bernard. The agenda that you see on the screen is that you find in the circular and indicates the order of topics we'll be dealing with during this meeting. It was prepared in order to allow to effectively respond to legal requirements and to allow us to answer your questions. Compliant with the bylaws of our corporation, I propose that Madam [indiscernible], representatives of TSX Trust should act as scrutineers during this assembly. The scrutineers have handed in their preliminary report on the presence is here at the assembly, and I will read it. 374 shareholders or proxy holders may vote during this assembly, they are present or represented via proxy. The total number of category A variable voting right shares and Category B voting right shares represented in person or by proxy at this assembly is 14,403,283 shares, which represents 37.20% of shares with a voting right and shares in circulation, of this number, 319,673 are variable voting right shares Category A shares and 14,083,610 are Category B voting shares. As demanded by our bylaws, each Class A share with variable voting rights incorporates 1 vote per share. This report will be incorporated into the file. The scrutineers confirm that compliant with these corporations rules, we have quorum and this annual and special assembly is duly called and is ready to deal with any business that may be legally submitted to it. I will ask now the Secretary to present the proposals and to explain the rules of procedures for today's meeting.

Thank you. The proposals presented at this assembly are described in the circular and include the election of the 11 members of the Board, appointment of external auditors for the next year and their authorization to set their compensation. examination of the resolution at Annex B of the circular on ratification of modifications for the employees' share purchase plan. The examination and approval for consultation purposes without the vote being binding of a resolution having to do with the approach the corporation has in compensating its senior management, vote on proposals 1 and 2 submitted by the Mouvement d' education et de defense des actionnaires, better known as MEDAC. These are found in Annex D of the circular. And finally, deal with any other matters that may be normally submitted to the assembly or to any -- all these proposals will be decided by a secret ballot -- and if -- each proposal must be adopted by at least a majority of the votes by all Transat shareholders who are present or represented by proxy. We will return to the matter of election to the election of the Board members. As mentioned earlier, the incorporation has decided to notify and offer access to the -- of documents for the assembly as set out and authorized according to regulations. Instead of sending paper, shareholders receive a copy of the call to the meeting and notice of availability of proxy documents, which explains how to consult the proxy documents and obtain a paper example, if you wish. TSX Company as Secretary for the corporation, has proof of that all shareholders were sent the following documents: notice of meeting, notice of availability of documents, proxy form, including a declaration of property and control and the annual report of financial statements for 31 October 2023, according to the auditors. These documents were sent in compliance with laws and regulations governing the society and copies of these and proof of their sending has been kept with the assembly's minutes. Since these documents have already been communicated to all shareholders, we consider that you've read them and you have taken knowledge, so we will not read them. We will also not read the notice of meeting and the minutes of the last annual assembly of 9 March 2023. This will be considered as read and approved. I request that the minutes be signed and included in the minutes for this meeting. We'll now present the questions submitted to the assembly, one after the other, and then we'll hold a formal vote. To simplify the vote, we'll open the voting platform immediately to give you a chance to vote. And we will close the voting platform 5 minutes after presentation of the final proposal. Further, in order to not prolong an unduly this assembly, certain shareholders or proxies have accepted to present these proposals and others have accepted supporting them. The vote is now open for all resolutions.

Let's look into now the administration or rather the election of Board members. We'll remind you that shareholders have been invited to vote for each of the persons proposed as candidates individually. Bernard, can you give us further details on our majority of voting policy.

The majority of policy for the vote sets out that in an uncontested election of Board members, any candidate who receives a greater number of votes against rather than votes for will not be elected as a member of the Board. Notwithstanding the director -- the incumbent director who was a candidate and was not elected during this vote, will remain in position until the first of the following days, the 90th day following the date of his or her election or the day where the election of or appointment of his or her replacement. Furthermore, the Board may appoint administrators or directors in order to make sure the Board is composed of the resident -- a number of residents from Canada and Board of Directors and directors were not administrators or employees. I'd like to thank these 11 persons who are sitting on the board or have accepted being appointed. Their bios are available in the circular. Since we've not received other nominations within the prescribed time according to regulations, we'll now vote. As stated earlier by the Secretary, shareholders were invited to vote for each of the 11 candidates and this vote should be done individually. I request now a proposal for the election of each of the 11 persons who are candidates to sit on the Board of Directors of the Corporation.

Madam, President. My name is Jean-Francois Pruneau, I propose we elect. My name is Genevieve Broullette, Ms. Lucie Chabot, Ms. Valerie Chort, Mr. Robert Coallier, Daniel Desjardins, Ms. Annick Gerard, Ms. Susan Kudzman, Mr. Stephane Lefebvre, Mr. Bruno Matheu, Mr. Ian Rae and Ms. Julie Tremblay as members of the Board up until the next annual shareholders assembly or until their successor might be duly elected or appointed.

Thank you, Jean-Francois. Does anyone wish to support this proposal.

Yes, my name is Andrea Gagne. I support this proposal.

The following point in the agenda is the appointment of external auditors for the corporation and authorization given the board to set their compensation. The management thinks it's proper to have a new mandate for Ernst & Young to follow its present mandate. I will ask a shareholder to present a proposal to that effect.

Madam Chair. My name is Bernard Bussieres and I propose that Ernst & Young be going to the external auditor for the corporation until the next annual assembly and that the Board of Directors be allowed to set their compensation. Does a shareholder want to support this proposal?

Yes. My name is Andrea Gagne and I support.

Now we will deal with the matter of ratification of the employees share purchase plan. Amendments have been made. And before proceeding with a vote on the resolution, I will ask the Secretary to briefly explain the modifications that were made to the purchase plan.

As described in the circular, the Board has approved and proposed to this assembly to ratify the share purchase plan for employees as it's been amended. This regime was initially put in place in 1989 and was modified a number of times. It seems to allow employees of the corporation and its affiliates to monthly make share purchases at market price, minus 10%. On the 18th of March, the Board approved the implementation of a new reserve of a total of 950,000 shares that are issuable on top of the 997,901 shares that were issued in the purchase plan context. The Board has taken into account that this new reserve of 1,947,901 shares represents about 5% of shares issued. I'll ask a shareholder to present a proposal to this effect.

Madam Chair, my name is Andrean Gagne. I propose we adopt resolution set out in Annex B in the circular.

Does another shareholder wish to support the proposal?

My name is Bernard Bussieres and I support this proposal.

Let's deal now with the proposal concerning the corporation's compensation of senior management. The text for this is on Annex C of the circular. Before voting, I'll ask the secretary to briefly explain the details.

The 14th of December 2011, the Board approved a consultative vote policy on compensation for senior management to give shareholders an opportunity to view -- to voice their views in this manner. Since then, at each assembly, this corporation has held a consultative vote that is nonbinding, concerning the compensation of senior management. The idea is to give shareholders an opportunity to view -- to voice their views on the compensation packages for senior management. This is nonbinding and Board members are fully responsible for the decisions and are not released of this responsibility following a positive or negative vote when we consult shareholders.

My name is Andrea Gagne. I propose we adopt the consultative nonbinding resolution for shareholders concerning compensation of senior management as described in the circular.

Would a shareholder like to support this proposal?

I support the proposal.

Now we'll deal with the MEDAC's #1 proposal regarding holding annual assemblies in person, we'll let Mr. Willie Gagnon speak. He will present his proposal.

Madam Chair, my name is Willie Gagnon. I'm acting on behalf of the MEDAC. Can you hear me?

Yes, we can.

Good. We presented a number of proposals this year, and 2 have been submitted for a vote. The first one has to do with holding annual assemblies in person until the pandemic struck us. Previously, all these assemblies were held in person, because of the pandemic the state allowed for virtual meetings to be held and also allowed the fact that these in-person assemblies are not being held. So we are pleading in favor of a return of in-person meetings. We have nothing against virtual meetings, but why we would like it to still be in person, once again is because there are many things that are possible in a meeting held in person that is not possible in virtual assemblies. If I look next to me today, I can see who are the other shareholders present in the room. In the virtual room, it's not possible to see who is waiting at the microphone to speak during the assembly. We presume there's nobody for the moment. But at question time perhaps there will be some people. It's also -- it's possible to speak with other shareholders in a n-person assembly. If these things are not favorable to the proper proceeding of an assembly, why is it. We think that maintaining in-person assemblies would be beneficial. We won the vote on the same proposal at [ Meto ] CIBC, at BMO. We had substantial support at RBC and other corporations. And in fact, your direct competitor, Air Canada has received this proposal and went with the original idea, which is to not emit recommendations on how to vote on this proposal, and we received 82% support in favor of in-person meetings. In your response, you talked about costs, the extra cost of holding a meeting in person. It might have been worthwhile to cut into the promotional video budget that was presented at the start of this assembly and instead hold meetings in person. It's never killed Transat before to have these in-person meetings in the past. So we invite all the shareholders to support this proposal. Would you like me to proceed with the next proposal or shall we vote first?

If there are no questions or comments, let's vote for the proposal immediately. I'd like MEDAC's representative to make the proposal.

Well, that's me. I propose.

Thank you. We gather that this proposal has been supported. We chose again this year to hold a -- we're holding it virtually again this year. We understand your arguments regarding what an in-person assembly can mean to a number of shareholders. We are open to holding it in a hybrid fashion for our next shareholders. Next year's meeting will be in a hybrid mode there.

Well, you see me very happy and surprised to learn this news Madam Chair. I understand that you have access to the results of the votes that have already come in because I cannot know whether we won or not. Anyway, thank you so much for that news. It makes us happy. I understand that I now have to go to the second proposal submitted to the vote. It is a proposal to make sure that the company assures a follow-up as far as the results obtained at the consulting vote on last year's remuneration. Last year, 16% of votes were expressed against the policy. And systematically, MEDAC sends proposals about the subject when the level of support in favor of the remuneration companies -- of companies not get to 90%. We did mechanically because we wish for the behavior of companies in the stock market. Be harmonized. We also wish that when a company does not get to such a level of support, it goes and see shareholders who voted against this proposal in order to know what the reasons are why the shareholders decided to not support the remuneration policy of the company. We can read in your answer, all sorts of things, but not that we would have accepted voting on that if the company had written in its answer, what they did in order to try to find out the reasons why certain shareholders are opposed to its remuneration policy. So they try to avoid coming to the vote on questions such as this one, if we could have every year a list of all the steps that were taken by the company to know why there are shareholders that are opposed on the question of payouts. So that is the reason why we ask shareholders to support this proposal, and I thank you.

If there are no further questions, let's now proceed to the vote on this proposal, I would ask a representative of MEDAC to present a proposal to this effect.

Well, I do so.

Thank you. We understand that this proposal is duly seconded. I will now explain the company's position in this matter. It should be noted that we already disclosed on a recurring basis through a proxy circular, our approach as well as the objectives with respect to compensation. We ensure that our compensation programs are aligned with the interest of our shareholders, and we believe that the compensation of our senior executives takes into account both Transat's overall situations, including the constraints imposed by the [indiscernible], emergency credit [indiscernible] and our need to attract and retain talented employees in the interest of all the company's shareholders and other stakeholders. We periodically review in conjunction with dependent external advisers, the nature of the remuneration packages and the potential value and ensure that overall, the value of total remuneration remains competitive with the practice of comparable companies and with the market practices of public companies in general. You bring excellent arguments, but for these reasons as well as the set out in proxy circular, it is proposed to vote against shareholder proposal #2. As you may have read in the circular, MEDAC has submitted 3 other proposals, which following discussions between the company and MEDAC are not subject to shareholder vote. You will find them at the very end of the circular and Appendix D along with the company's position on each of these proposals. We would also like to thank MEDAC for their support and openness during these discussions. I know that we are happy -- that you are happy, Mr. Gagnon. And I now give the mic to Mr. Gagnon, who will briefly summarize MEDAC's position on these 3 proposals, which I would remind you, are not subject to shareholder vote.

I will, of course, be very brief. We agreed with the company in order to not require having a vote on these 3 proposals. The first was about incentive remuneration for all employees in relation to the ESG objectives. We're able to read in your answer the percentage of the objectives that are given over to these matters, and that is what we were looking to know and we can see that the company already did what we were asking you to do in the details of its policy. Proposal wanted a disclosure of the languages spoken by the executives. We asked for the administrators last year, the company has accepted giving us disclosing executives. Language knowledge this year. Perhaps we'll ask for a proposal for the language disclosed or master by employees. It's not yet the case, but maybe it will be so, and we're happy with the situation taking into account that the company has accepted to disclose this information. And thirdly, the consulting vote on environmental practices, a proposal that is based on the same principles as those that are at the base of the series of consulting vote on the company's remuneration policy. But in environmental matters, it is what the [indiscernible] like to call the [indiscernible]. There's already a series of companies that have that practice. We have accepted on the basis of the situation in terms of what the industry is concerned, the aviation industry that is as well as the travel industry, to not submit this proposal to vote. And as you say in your answer, we also, of course, preserve the possibility of coming back with a more adapted proposal -- better adapted to your situation within the framework of the sector in which you evolve. So we are satisfied of the discussions that we were able to have with the company, and we imagine that we'll be able to maintain them in the future. And we thank you for all the time that you have granted us. I know that it is a great deal of time, but we are, of course, of the opinion that this is important, and we thank you.

Thank you, Mr. Gagnon. For those of you who haven't already done so, we ask you to vote on each of the proposals presented. I would like to remind you that only persons who were shareholders at the close of business on 13th of March 2024 or their proxies may vote at the meeting. In addition, make sure you complete the resident's questions so that your votes can be counted. In order to not unduly prolong this meeting, we will announce the results of the votes cast for each of the items on the agenda at the very end of the meeting. You have 5 minutes left to vote, after which the voting period will be over. [Voting]

While the scrutineers tabulate the votes, I'll take the floor for a few minutes and then ask Ms. Gerard and Mr. Pruneau to present the highlights of the past year and give an overview of our current financial situation. The results of the votes and the question period will follow, but you can send us your question now.

So ladies and gentlemen, shareholders, Transat employees, many of whom I know are listening Colleagues on -- of the Board of Directors. Thank you all for tuning in to find out more about our company. I've been a member of Transat's Board of Directors for exactly 10 years, this month. Today is with great honor enthusiasm that I address you for the first time as Chair of this Board. I've seen Transat evolve, adapt and renew itself. What a fantastic job. This industry is so demanding. It is exposed to all wins. The economy, the price of fuel, geopolitics, the problems of aircraft and engine manufacturers, the accessibility of airport infrastructures, the context of the rapidly changing labor market and so on. But Transat has a unique and precious asset, the people who enjoy this industry from the cabin to the tarmac, whether it be mechanical, maintenance employees to shareholders, from travel agencies to the chair, to the members of the Board of Directors. These are people who thrive on challenges who are able to bounce back from bad days, who are happy to celebrate victories. I wish to pay tribute to them. These people are passionate, they're fighters. I've been happy and proud to see this at Transat for over 10 years. The Board of Directors is well aware of all the work that has been done. We see all the efforts made on a daily basis at every level of Transat. The last few months have been revealing for this emotionally charged industry. After 4 very good quarters in 2023, which generated enthusiasm, the first quarter of 2024 showed us that the industry has not finished recovering. Demand has remained strong, but we can see that the economic context is beginning to weigh on the company. We have felt a slowdown in the economy, which we can see among consumers and businesses and governments pretty much everywhere. It's no coincidence that there have been labor disputes in various sectors. Transat has not been immune to these tensions. We are delighted to have reached a long-term agreement at the end of February with the union representing flight attendants. They have intimate and prolonged contact with our customers and are therefore, so important to Transat's quality of service and reputation. Despite these headwinds, Transat must pursue its strategic plan and evolve in this volatile context and environment. The challenges are ongoing in variant nature. I've spoken about it, financial pressures, aircraft engine problems, supply chain failures. Fortunately, we have many trump cards under our sleeve. There are always plenty of travelers. They trust Transat, they love Transat and Transat's operating performance proves some right. And as always, a fantastic team. Over the past year, the Board of Director has worked with Annick and the management team to identify measures aimed at returning the company to profitability. These measures will enable us to better contain costs and expenses and optimize revenues and performance. Over the past year, the Board has been involved in a number of important issues, always in support of the management team. We were involved in discussions with the federal government in debt refinancing. Also when we signed our joint venture partnership with Porter. We monitored the strategic plan. We were involved in the process that led to the recruitment of our new Chief Financial Officer, Jean-Francois Pruneau whom we welcome with confidence and happiness in January. The Board of Directors has been set up to provide enlightened governance and to bring together through the cumulative experience of its member's, high-level expertise in key areas with the aim of supporting management. This collaboration between the Board and management is a dynamic one and the Board is involved in the company while respecting each other's roles. I am very proud of this experience -- experienced, agile, flexible Board dedicated to Transat, and I'd like to take opportunity to thank each and every one of them for their efforts this year. I'm delighted that all of the members have expressed their intention to remain in office with, of course, a shareholder vote in favor. This stability will be welcomed by management and the entire organization, particularly in the current climate. We look forward to the months ahead with confidence. Transat remains in development mode, and we have adapted the pace of growth to the current situation. We will continue to carry more passengers to exploit high potential routes to add promising destinations and to develop strategic partnerships. In recent weeks, we have begun to reflect on the company's next strategic plan, and we will continue to do so over the coming months. It will focus on innovation, digitization and optimization. It will be based on the values that set us apart and on the conviction that the quality of the employee experience is a prerequisite for the quality of the customer experience. Transat's beautiful reputation is built on a warm welcome and excellent service. This company has heart and talent, and it has the right people to succeed and create value for its shareholders. In closing, I would like to thank the federal government for its support and constructive dialogue. Governments have a key role to play in helping the industry recover. A healthy airline industry is critical to society's economic development. On behalf of the Board of Directors, I would like to reiterate our full confidence in and our enthusiastic support for the Chair and CEO, Annick Guerard as well as her team.

Thank you, the shareholders. You are part of this exceptional team. Part of this constantly evolving project. Thank you for your time. Annick, the mic is yours.

Thank you, Susan. Dear shareholders, dear employees, First of all, I wish to welcome Jean-Francois, our Chief Financial Officer, our new Chief Financial Officer. Thank you for bringing all of your experience and expertise to Transat. By the time we meet again, Transat is ready for the summer. Our teams are complete and dedicated to their work. We have the necessary aircraft to operate our program. We have deployed superior capacity compared to last year. The new route towards Marrakesh in Morocco and Lima in Peru have been immediate successes. Airports, including those in Montreal and Toronto have reached smoother operating levels. In a demanding environment, Transat is developing in a prudent and calculated way. The economy is still fragile, and we feel it above all, the airline industry. The airline industry supply chain is still broken. Their problems with engines, with parts, with maintenance schedules and all of these are important. Nevertheless, we look forward to the rest of 2024 with confidence, not because it will be easy, but because we've already been through so much worse. Let's be clear, the situation is much better than it was 2 years ago. We are operating in a general climate of recovery. The 2023 financial year had raised a lot of hopes. The first quarter 2024 reminded us that there will still be ups and downs. We now understand that it will take more than enthusiastic travelers to revive an industry that has seen its aircraft grounded worldwide. Its revenues plummet and its debt rise. It will take more time, more effort and more investment. The industry has returned to its former level of activity, but has not yet regained its former stability. Solid demand remains the basis for recovery. Spending on travel remains a priority for consumers, although the context is changing. What we call revenge travel was particularly prevalent in 2023. When people were very keen to travel and had available cash. We are now facing a context of steady demand, but in an environment of aggressive supply with a widespread increase in capacity by all players in the industry against this backdrop, we are adjusting dynamically. Keeping a close eye on trends in consumer discretionary spending. In this business environment, Transat remains well positioned and is developing with prudence and determination. We have adopted a number of measures to maintain tight control over costs to ensure a high level of spending discipline and to make our investments at the right time and in line with market opportunities. Since the start of 2024, we have continued to clean up our network. We are continuing to develop our high potential routes. Our European destinations, particularly to France remain winning and profitable for Transat. The opening of services to Morocco and Peru have been extremely well received by travelers. On the other hand, we are abandoning certain routes that are of less interest to us in order to deploy our aircraft to more promising destinations based on our assets, our strengths and our expertise.

Our networks are complementary, Porter is a leader of the Canadian and the national market, and we are the specialists of routes towards South and Europe. Already, the code-sharing agreement we have in place has brought an extra flow of passengers amounting to 9% for the summer season coming in Europe. The synergy will increase with the joint venture that is going to be in place for this summer. We'll fill planes together when it will be in the interest of both of our business and that of travelers as well while keeping our full independence. This is the point of the joint venture that we have entered into last fall. Re-centering Transat in Quebec and in Ontario, optimization of our network, the opening of new promising destinations and the conclusion of strategic partnerships. These are all structural decisions that were in our strategic plan. This judicious plan has led us reposition and restructure Transact. It lets us build for the future on a solid basis. We are beginning now the preparation of the next strategic plan with many projects in mind to increase our productivity, to increase the quality of our product and to build a deeper relationship between Transat and its precious clientele. Operationally speaking now, the main challenge for Transat is the matter of plane engines. The Pratt & Whitney GTF motors that power all of our Airbus 321LR planes. It's not a security problem. But these problems mean that the engines have to be returned to the manufacturer more frequently. There is a bottleneck at Pratt & Whitney engines from different airlines are accumulating. The effects of this situation are many, an impact on cost because we have to rent planes in the short-term market, which is saturated because of the situation impact on our operations because our temporary fleet does not let us offer exactly what we would like to offer our customers, also effects on our revenues in certain routes. But this situation is not specific to Transat. We developed operational agility and special measures to attenuate the impact. We're trying to face the situation the best possible, but we are discussing along with other carriers for attention of indemnization, confidence for growth and value creation. We're well positioned. We emphasize families, family ties and we're connected with the cultural communities. The company is evolving in harmony with the growing diversity we find in Montreal, Quebec in Canada. Transat will continue evolving by emphasizing its assets, reliability, proximity, accessibility. By being faithful to its reason for being reduced distances that separate us by stating its difference, a company rooted here in Montreal and in Quebec. The Blue Star has its own personality, its own brand and reputation. We will remain an authentic company, which embodies its human values. Over the past few months, we've learned much about our approach in the labor relations, and this is true of both sides of the equation. We have to have a more modern collegial view now. We have to continue moving forward together in an environment of mutual trust, transparency and collaboration. We have to remind ourselves that at every level of the organization, it's important to maintain a dialogue and to clarify disagreements before they become conflict. Transat reputation was built by its employees. Our welcome is the first and final memory of someone's trip. Each of us must feel that his or her contribution to the company's success is well understood and recognized. In these circumstances, Transat is doing well. We are fighting with passion and panache and we are managing to develop in spite of the strong financial pressure. Thanks to the quality of our execution, the skills and know-how of our personnel and strong demand, we are looking to the future. Our operations are efficient, deposits by clients are at a record high, and we have a positive cash flow. But we'll need still more oxygen to find once again the development pace that meets the real potential for Transat. Therefore, restructuring our debt will be a determining factor. Transat is not an ordinary company. It's a symbol. It represents 5,000 jobs, a network of partners and suppliers who are extraordinary and generate substantial economic activity. More than 5 million travelers per year, 36 years of international travel, headquarters in Quebec, an airline that distinguishes itself year and year out for the quality of its service, a corporation that works firstly in French and is proud of its roots. In the Canadian context, Transat, third largest carrier is an essential player in airline travel. In fact, all travelers benefit from Transat's presence in this market because our presence maintains a competitive environment. This airline, which resembles us and which brings us together wishes to grow -- to grow to its full potential and to be active in North America, the Caribbean, South America, Europe, Africa, we will go everywhere where you come from. We will go everywhere in order to let you join the people that you love. This is what we want to accomplish with our employees with the support of the Board of Directors. And with shareholders and customers full trust. Thank you. Now we will hear from our Chief Financial Officer.

Good morning, ladies and gentlemen, I'm very happy to speak to you here today. It's the first time I speak at the annual assembly. I began my -- in my position in early January. Since then, I met many of our long-term partners and shareholders. It's very important for me to have a continuous dialogue. I've seen these exchanges that you were very attached to Transat, and you want to see the company succeed. Thank you for this. I joined Transat with great enthusiasm. I really believe in the potential of the corporation. Throughout the recruitment process and since I arrived in my position, I'm impressed by the competency and skills that I find at Transat, and I admire the passion of the people who work there. I have more than 25 years' experience in different functions within large Canadian corporations, including 17 years at Quebec, where I was Vice President and COO before joining Videotron as President and CEO. It's essential for me to point out the high level of excellence in management that I see at Transat. There are other things as well that I'm familiar with at Transat. It's a sector that's undergoing important transformations. The financial strategies are complex and all of this in a regulated environment with strong competitive pressure. Transat had a very good financial year in 2023. The company ended fiscal year 2023 with revenue of $3 billion, and EBITDA adjusted of $263.3 million and a EBITDA margin of 8.6% and cash flow is available in the amount of $162.4 million. The first quarter this year has represented a change and has slowed. It is down a little bit. But I agree with Annick, the industry will not recover in a linear fashion. There will be bumps in the road. A number of encouraging elements in this first quarter put us in a good position for the rest of the fiscal year. Revenue has progressed strongly, an increase of 18% relative to the first quarter of last year. Travel demand is still high. Deposits by clients have hit a record $1.027 billion, an increase of 14% relative to 31st January last year. And our cash position is solid with cash and cash equivalents in the amount of $453.3 million. Transat is very busy. We managed to face our obligations and to put aside a bit of capital for investment purposes. Our priority, however, is a return to profitability. We will accomplish this by keeping better control on our expenses, finding new ways to stimulate revenue and by putting in place strategic alliances giving us access to new pools of clients. A return to profitability is possible, but will be difficult in the short term. Refinancing the debt will determine how we will be able to do this. It will be important to obtain flexibility in this respect. You have a company that was first in the class in terms of finance. Transat had no debt whatsoever in 2019. And then along came this historic crisis and Transat was the first with its plane grounded and was among the last to take off again, given that it serves the international market. And this was impossible because all borders were closed. After 20 months of forced inactivity Transat has now accumulated disproportionate debt regarding -- in comparison to the size of the company because of these special conditions brought about by the pandemic. A number of countries like the U.S. and European countries have offered financial non-reimbursable support to their airlines, but Transat didn't benefit from this. Canada needs strong competition in airline travel. Quebec needs that -- Quebec's favorite carrier should be able to compete. Since the crisis occurred, Transat has faced all of its obligations with honor and rigor. The company has managed to recover in spite of this debt. And in spite of this other bad luck which is the problems we have with Pratt & Whitney engines, but Transat is capable of continuing and to gain altitude once again. My priority, therefore, is the execution of our refinancing plan. Transat has made a striking demonstration of its excellence over the past couple of years. I've joined a winning team, and I'm very happy of this. Transat shareholders have in their hands a company that they can be proud of. Thank you for your support. It will be a great pleasure to collaborate with you and to show you across the years, the full potential for development that Transat has.

Thank you, Annick and Jean-Francois. The scrutineers have handed in their preliminary report. I accept the report and declare that all candidates have been elected to the Board and each nominee received at least 95.65% of votes in favor of their election. Also, the proposals for the appointment of the external auditor, the adoption of the resolution approving amendments to the program for employee share purchase. The approval of the consultative resolution regarding compensation of senior management. All of these have been duly adopted. I declare as well that proposal #1 presented by the MEDAC was adopted, and Proposal 2 was rejected. Details of voting results will be filed on SEDAR+. I'd like to thank all shareholders who have participated in the vote. This takes us to our question period now. I remind you that Annick, Jean-Francois, Bernard and myself are available to answer your questions. The question period will be moderated by Andrean Gagne. I'd like to remind you that only shareholders and proxy holders are allowed to ask questions, and these may be submitted in writing or by telephone in French or in English. For any questions, select the messaging icon at the top of your screen, type in your question or write in your phone number into the text field and click on send. For those who want to ask a question via telephone, an operator will communicate with you. I'll begin with the first question. Perhaps we can wait a few seconds for people who would like to submit a question. I see that our presentations were pertinent and complete since there are no questions. Andrean, you see no others. Since there are no questions and there's no other subject to be dealt with on the agenda. I propose that we adjourn.

My name is Jean-Francois, I propose that we adjourn this assembly. Does a shareholder wish to support this proposal.

Yes, I support the adjournment.

This proposal is adopted, and we adjourn this meeting. Ladies and gentlemen, thank you for your presence and your support, and have a great day. [Statements in English on this transcript were spoken by an interpreter present on the live call.]