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Transat reports $121.3M Q4 loss, but remains “optimistic” about returning to normal

  • Air
  •   12-09-2021  9:16 am
  •   Pax Global Media
Transat reports $121.3M Q4 loss, but remains “optimistic” about returning to normal
Annick Guérard, President & Chief Executive Officer, Transat. (File photo)
Pax Global Media

Transat’s President and CEO says the company remains “optimistic that we're on track to returning to normal” following the release of its fourth quarter results on Thursday (Dec. 9), which revealed $121.3 million in losses.

“The winter season that is now beginning will see the continuation of our return to more significant volumes,” said Annick Guérard, president and chief executive officer of Transat, in a statement, adding that “we remain cautious given the evolving variants” of COVID-19.

The parent company of Air Transat reports that its revenue more than double compared to last year.  Revenue for Transat’s fourth quarter, ended Oct. 31, totalled $62.8 million, up from $28.4 million in the same quarter in 2020.

READ MORE: Air Transat & WestJet to cooperate on transatlantic codeshare

On an adjusted basis, Transat lost $3.14 per share in this latest quarter compared with a loss of $4.14 per share a year ago.

“…we're continuing our transformation,” Guérard said. “Following the extensive streamlining of our fleet that has been ongoing for several years, the codeshare agreement announced this quarter is the first step forward in our alliance strategy, with further advances to follow in the coming months.”

On Nov. 19, Air Transat and WestJet agreed to cooperate on a codeshare that will allow customers to book transatlantic travel involving both carriers on a single ticket with through-checked bags.

Growing capacity

This winter, Air Transat plans to operate from eight Canadian airports and serve eight destinations in Europe, 22 in the South and five in the United States, including Miami and Fort Myers for the first time.

“To do that, we will be deploying capacity that will grow from 50 per cent to 75 per cent of pre-pandemic capacity over the winter,” Guérard said. “We will then build volume further for the summer season, which will include two new routes to Europe and two new destinations in the United States.”

Transat started 2022 with more than 2,000 employees, compared with only 750 at the height of the crisis.

“The volume we project will allow us to recall about 1,500 more during the year,” Guérard said.

Across all markets, Transat’s average capacity for winter 2022 is 60 per cent of 2019’s capacity, increasing from 50 per cent to 75 per cent over the course of the season.

For sun destinations, the company’s main program for winter, Transat's capacity in 2022 represents 55 per cent of 2019 capacity.

On the transatlantic program, where it is the low season, Transat's capacity represents 65 per cent of 2019’s capacity.

The company is also increasing its presence in the cross-border market with capacity growth of 45 per cent compared to 2019 winter season capacity.

“Encouraging signs"

As of Oct. 31, 2021, Transat’s cash and cash equivalents amounted to $433.2 million, compared with $426.4 million on the same date in 2020.

Last April, Transat entered into an agreement with the Government of Canada that allowed it to borrow $310.0 million to issue refunds to eligible travellers.

Customers had until Aug. 26, 2021 to submit their refund requests. Transat says it received requests for about $460.0 million and made refunds for “approximately 99 per cent of amounts claimed” as of late Nov. 2021.

Despite recent uncertainty related to the emergence of the new Omicron COVID-19 variant, the current situation shows “encouraging signs,” such as the level of bookings observed and the increase in the vaccination rate.

“However, it remains impossible for the moment to predict the impact of the COVID-19 pandemic on future bookings, and on financial results. Consequently, for now the corporation is not providing an outlook for winter 2022,” the company said.

Transat also announced that Jean-Yves Leblanc and Louis-Marie Beaulieu have said they will step down from the company's board of directors at the end of the year.

Former TVA Group and Quebecor Media Group CEO Julie Tremblay and former Bombardier executive Daniel Desjardins have been appointed to fill the vacancies, effective Jan. 1, 2022.