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Wednesday,  June 12, 2024 11:23 AM 

Amid “industry-wide issues," Transat sees Q2 net loss of $54.4M

  • Air
  •   06-06-2024  7:46 am
  •   Pax Global Media

Amid “industry-wide issues," Transat sees Q2 net loss of $54.4M
(Pax Global Media/file photo)
Pax Global Media

Transat A.T. released its second quarter results on Thursday (June 6), reporting a net loss of $54.4 million (versus the $29.2 million Q2 loss it reported last year).

For the three-month period ended April 30, 2024, Transat’s revenues reached $973.2 million, up 11.8 per cent from $870.1 million in the corresponding period a year ago, the company said.

The increase reflects sustained demand for leisure travel driven by a 12 per cent increase in traffic expressed in revenue-passenger-miles (RPM).

However, the increase was reined in by intensified competition, inefficiencies resulting from engine issues, the consequences of union strike threats, and the economic slowdown, which put downward pressure on airline revenues, resulting in a 7.5 per cent decline, the airline said.

Company-wide capacity, meanwhile, was up 13 per cent from last year.

In a statement, Annick Guérard, president and CEO of Transat, said the company delivered double-digit revenue growth for a second consecutive quarter on the strength of increased customer traffic.

“On the profitability side, adjusted EBITDA declined to $38 million in the second quarter due to well-documented industry-wide and company-specific issues," noted Guérard.

At any rate, from an operational standpoint, Transat is fully prepared for the summer season, Guérard added.

“As such, we recently completed the process of bringing in-house passenger and ramp services at Montreal-Trudeau International Airport to enhance the customer journey. Additionally, with the launch of phase one of our commercial joint venture with Porter announced yesterday, we will benefit from additional leverage to optimize our partnership,” she said.

Air Transat and Porter Airlines are launching the first phase of their joint venture.

As previously reported, travellers can now use each partner's distribution channels to book direct and connecting flights with either Air Transat or Porter, therefore significantly increasing their access to a wide and expanding range of destinations around the world.

Seven new aircraft

In the coming weeks, Transat will complete the reception of seven aircraft, including four A321LRs “that represent the cornerstone of Transat's fleet and growth strategy," added Ms. Guérard.

Transat’s leadership also addressed the company’s debt load,

"We diligently continued to deleverage our balance sheet in the second quarter, reimbursing subordinated debt of $36 million and raising total loan repayments to approximately $110 million in the last three quarters, We also extended the maturity of the secured debt from April 2025 to February 2026 to provide Transat with added flexibility to secure a refinancing agreement," said Jean-François Pruneau, chief financial officer of Transat, in a statement.

To date, load factors for summer are 2.1 percentage points lower compared to the same date in fiscal 2023, while airline unit revenues, expressed as yield, are 8.0 per cent lower, the airline said.

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