The Omicron variant delayed a potentially solid first quarter recovery for Air Transat, and the airline says it’s discussing an additional aid package with the Justin Trudeau government in Ottawa.
Transat A.T. Inc. today announced revenues of $202.4 million but an operating loss of $73. 8 million for the quarter ended January 31, 2022.
“While we were in the midst of a strong recovery, with November and December results matching our targets, the emergence of the Omicron variant brought our sales to a temporary halt between mid-December and early February,” said Annick Guérard, President and Chief Executive Officer of Transat. “Subsequently, and particularly after the easing of restrictive measures at the borders, bookings picked up again, for both winter and summer, which augurs well for the coming months.
“We, therefore intend to continue with our initial strategic plan and stay the course for the summer,” she said. “Our recovery plan has allowed us to recall approximately 500 employees since the start of November and we are delighted to see that many of our customers in Canada and Europe are eager to travel after two years of the pandemic.
“Our code-sharing agreement with Porter Airlines announced on Tuesday also demonstrates the progress made towards our longer term strategic goals,” Guerard said.
“The deferral of certain terms of our financing under the Large Employer Emergency Financing Facility (“LEEFF”), as well as the securing an additional $43.3 million for refunding travellers, will facilitate our recovery following the resurgence of the pandemic,” she added.
“Although we are in recovery, the impacts of COVID-19 are still being felt and the geopolitical situation is constantly changing. As we will remain in a cash burn situation for the coming months, we are also in discussions with the federal government for additional funding.”
First quarter highlights
Compared with 2021, revenues for the quarter ended January 31, 2022 were up $160.5 million (382.9%). This increase resulted mainly from a rise in the number of travellers combined with a slight increase in average selling prices. Compared with the same quarter of fiscal 2019, revenues for the current quarter were down 68.7%. Since mid-March of 2020, restrictions on international travel and government-imposed quarantine measures have made travel sales very difficult.
Revenue growth in the quarter was dampened by the sharp decline in demand and massive booking cancellations following the emergence of the Omicron variant during the quarter and the new restrictive measures put in place by the federal government on December 15, 2021. As a result, the Corporation cancelled nearly 30% of flights scheduled for January.
Operations resulted in an operating loss of $73.8 million, compared with $98.0 million in 2021, an improvement of $24.2 million. The improvement in operating results was attributable to the gradual and partial resumption of airline operations. This improvement in operating results was however reined in by the cancellation of nearly 30% of flights scheduled for January following the emergence of the Omicron variant, as discussed previously. Transat reported an adjusted operating loss1 of $36.4 million compared with $53.6 million in 2021, an improvement of $17.3 million.
Net loss attributable to shareholders amounted to $114.3 million or $3.03 per share (diluted) compared with $60.5 million or $1.60 per share (diluted) for the corresponding quarter of last year. The net loss attributable to shareholders in 2022 was marked by a $22.0 million foreign exchange loss, partially offset by a $4.0 million gain on disposal of assets related to the termination of an aircraft lease. The net loss attributable to shareholders in 2021 was mitigated by a $32.9 million foreign exchange gain and a $17.4 million gain on disposal of assets related to the termination of three aircraft leases.
