Transat posts Q1 net loss of $61M, says bookings impacted by strike speculation

Transat A.T. posted its first quarter results on Thursday (March 14), reporting a net loss of almost $61 million compared to a loss of $56.6 million a year ago as revenue climbed by almost 18 per cent.

The results reflect “sustained demand for leisure travel,” said Annick Guérard, president and CEO of Transat, in a statement.

The increase in revenues were driven by a solid traffic increase, but the persisting speculation of a strike by flight attendants starting last November affected bookings and yield for the winter season, the company said.

A new collective agreement was reached in late February and removed this uncertainty.

As for the operating challenges related to a Pratt & Whitney GTF engine issue, costs incurred, Transat says, including those related to the temporary leasing of additional aircraft, which impacted profitability.

While demand remains “sound,” softer yields indicate heightened consumer sensitivity in the current economic climate, as well as fierce price competition – especially in Toronto, Guérard said.

Transat’s revenue for the period ended Jan. 31 amounted to $785.5 million, up from $667.5 million a year prior.

On an adjusted basis, Transat says it lost $2.11 per share this quarter compared with an adjusted loss of $1.62 per share one year ago.

Sharing its outlook, Transat’s early trends for the summer season indicate bookings and pricing conditions that are “largely in line with the same period last year.”

“However, as the corporation does not foresee the same uplift in yields that was exhibited throughout the summer season last year, it will remain proactive in managing costs under its control, while actively seeking to mitigate the structural cost increases affecting the industry,” Transat said.

Given the current operating environment, Transat has revised its fiscal 2024 capacity expansion plans to 13 per cent, versus 19 per cent previously.

Don't miss a single travel story: subscribe to PAX today!  Click here to follow PAX on Facebook.