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Monday,  June 24, 2024 12:05 PM 

Transat turns Q4 profit, sells equity interest in Marival Armony resort

  • Air
  •   12-14-2023  7:40 am
  •   Pax Global Media

Transat turns Q4 profit, sells equity interest in Marival Armony resort
Transat has sold its 50% equity interest in the Armony Luxury Resort & Spa, Marival Collection. (Pax Global Media/file photos)
Pax Global Media

Transat A.T. on Thursday (Dec. 14) shared its results for the fourth quarter and fiscal year ended October 31, 2023, with news of profitability.

The airline reported a profit of $3.2 million in its latest quarter, compared with a $126.2 million loss a year ago, as revenue rose more than 30 per cent.

Driven by robust yields, the airline secured revenues of $764.5 million – 10 per cent above 2019 levels on seven per cent less capacity – and with similar load factors.

“Transat has solidified its positioning in the Canadian leisure travel industry,” said Annick Guérard, Transat’s president and CEO. “As industry dynamics gathered momentum throughout the year, our team focused on meeting growing demand and improving operating efficiency, allowing us to end fiscal 2023 with financial results that exceeded the upper range of our profitability target.”

Transat generated a free cash flow of $162.4 million in fiscal 2023, “enabling us to reduce debt and conclude the year with an improved cash position," said Guérard.

"Looking ahead to the new fiscal year, Transat will continue executing on its strategic plan,” Guérard said.

Porter key to growth

Transat’s recently-announced joint venture with Porter Airlines “will be a key element in accelerating growth,” Guérard noted.

“We expect this agreement to gradually increase passenger traffic,” she said.

Meanwhile, a greater frequency on leading routes, the launch of new destinations and ongoing efforts to optimize fleet utilization will raise capacity by approximately 19 per cent in 2024.

In current operating environment, Transat expect its adjusted earnings margin to be in the range of 7.5 to 9 per cent in fiscal 2024, “which would exceed Transat's historical levels,” Guérard added.

“In addition, we intend to further improve our capital structure through sustained free cash flow generation," added Ms. Guérard.

For the full year, Transat’s net loss amounted to $25.3 million ($0.66 per share), compared with $445.3 million ($11.77 per share), for the previous year.

Reflecting healthy demand and selling prices in recent periods, Transat’s customer deposits for future travel stood at $754.2 million as at Oct. 31, 2023, up 25 per cent from Oct. 31, 2022.

Transat sells Armony interest 

Transat, also on Thursday, announced that it has sold off its 50 per cent equity interest in the Armony Luxury Resort & Spa, Marival Collection (previously known as Rancho Banderas All Suites Resort), located in Punta Mita, near Puerto Vallarta, on Mexico’s Pacific coast.  

The sale was made to its co-shareholder, the owner of the Marival Group.

Armony Luxury Resort and Suites in Punta Mita, Mexico was a Marival-Transat venture. (Pax Global Media/file photo)

The transaction is worth US$15.5 million and is expected to close during Transat's 2024 first quarter.

Transat says the proceeds of the sale will be used to repay debts. 

The move aligns with Transat’s plan to move away from hotels and refocus on its airline activities.

Transat purchased a stake in Armony Luxury resort in April 2017 as it worked at building its hotel division. That strategy was discontinued in 2021.

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