Wednesday,  August 17, 2022  10:29 pm

Transat reports $98.3M Q2 loss, but summer sales are progressing, says CEO

  • Air
  •   06-09-2022  8:24 am
  •   Pax Global Media
Transat reports $98.3M Q2 loss, but summer sales are progressing, says CEO
Transat’s sales are moving in a “very satisfactory manner” for the summer, said CEO Annick Guérard on Thursday (June. 9). (Pax Global Media)
Pax Global Media

Transat A.T.’s recovery is now firmly entrenched after it was temporarily slowed down by the Omicron variant earlier this year, said President and CEO Annick Guérard on Thursday (June 9), sharing the company’s second quarter results.

Transat’s sales are moving in a “very satisfactory manner” for the summer, Guérard said in a statement.

"When the effect of Omicron subsided at the end of February, operations and sales rebounded strongly, allowing us to end the quarter on a very encouraging note and generate revenues of $358 million for the period,” Guérard said. “We foresee a strong recovery and will continue to implement all the measures necessary to capitalize on it." 

By the numbers

Montreal-based Transat says its net loss attributable to shareholders in Q2 amounted to $98.3 million, or $2.60 per diluted share for the quarter, ended April 30.

This result compared with a loss of $69.6 million or $1.84 per diluted share a year earlier.

Annick Guérard, president & chief executive officer, Transat. (File photo)

Revenue totalled $358.2 million compared with $7.6 million in the same quarter last year when Air Transat suspended operations after Ottawa requested a suspension of travel to Mexico and the Caribbean and introduced quarantine measures and testing rules at the border.

READ MORE: Air Transat expands South, U.S. & Europe offering in winter 2022-2023 program

On an adjusted basis, Transat lost $2.95 per diluted share compared with an adjusted loss of $2.74 per diluted share in the same quarter last year.

"The cost of fuel rose sharply, without which we would have reported positive adjusted operating results in April,'' Guérard said. "Nonetheless, we observe that consumers are ready to accept price hikes and we have implemented a fuel hedging program to protect us against significant increases during the summer.''

The outlook

Transat’s plan, Ms. Guérard said, is to continue developing its network by adding new destinations and connections, with or without code sharing, and receiving new fuel-efficient aircraft.

“We also benefit from our employees' strong support, including our pilots with whom we have entered into a three-year agreement, ensuring stability for the coming period," Ms. Guérard said, 

The company says it will offer more than 1,200 itineraries (including 550 with Transat) in summer 2022, compared with about 500 in 2019.

The recent easing of health measures and travel restrictions by governments in Canada and other countries shows “very encouraging signs in terms of bookings as the last-minute booking trend persists,” the company said.

Following the Omicron wave, load factors have “largely improved” in recent months, reaching 85 per cent on flights from March to May for the south destinations program, Transat said.

“Selling prices of bookings for the summer season have been steadily increasing since the start of spring across all our programs,” the company said.

Across all our markets, the planned capacity for summer 2022 represents 89 per cent of Transat’s 2019 capacity.

For the transatlantic program, Transat’s main market for the summer season, the planned capacity in 2022 is 75 per cent of the 2019 levels.

In the sun destinations program, Transat’s planned capacity represents 98 per cent of the 2019 levels.

Moreover, Transat plans to increase its presence in the transborder market by quadrupling its capacity compared with 2019 by offering, among other things, new flights from Montréal to Los Angeles and San Francisco.

Transat also intends to increase its capacity by five per cent in the domestic market compared with 2019.

But fuel prices, if they remain at the current level, are creating “strong pressure on our operating costs and profitability,” Transat noted.

“The Corporation is making every effort to offset these effects and improve its performance,” the company said.

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