| Transat lost money in the second quarter, but revenues climbed sharply as travel rebounded around the world.
Transat A.T. inc., the parent company for Air Transat, today reported an adjusted second quarter loss of $51 million. But it said revenues were up $358 million, and that it’s bullish about the rest of the year.
“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. We foresee a strong recovery and will continue to implement all the measures necessary to capitalize on it,” stated Annick Guérard, President and Chief Executive Officer of Transat.
“Sales are progressing in a very satisfactory manner for the summer. The cost of fuel rose sharply, without which we would have reported positive adjusted operating results in April. 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,” Guérard said.
“For the longer term, we continue to implement our strategic plan. While continuing to receive new fuel-efficient aircraft to the fleet, we continue to develop our network by adding new destinations and connections, with or without code sharing. 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,” she said.
Second quarter highlights
Compared with 2021, revenues for the quarter ended April 30, 2022 were up $350.6 million, driven by the significant resumption of operations after the effect of Omicron subsided at the end of February. 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 first quarter and the new restrictive measures put in place by the federal government on December 15, 2021. As a result, the Corporation initially cancelled nearly 30% of flights scheduled from January to the end of February. In addition, at the beginning of February, the Corporation cancelled more winter season flights, thereby reducing total winter season capacity by approximately 22% of the initially deployed capacity.
 Transat is adding flights to San Francisco. Pixabay photo on Pexels.com. Financial position
As at April 30, 2022, cash and cash equivalents amounted to $511.2 million, compared with $346.1 million at the same date in 2021. In total, the available financing amounted to a maximum of $863.3 million, of which $858.6 million was drawn down, for unrestricted liquidity1 of $515.9 million.
Customer deposits for future travel stood at $494.2 million, representing 80% of pre-pandemic levels (as at April 30, 2019) and up 60% from last quarter, reflecting the strong recovery in demand.
In addition, management is pursuing discussions with all current lenders, in a spirit of continued collaboration, regarding amendments to the existing financing agreements in order to ensure greater financial flexibility to the Corporation.
Continuing the recovery and implementing the strategic plan
The recovery that was temporarily slowed down by the Omicron variant is now firmly entrenched and the Corporation continues to implement its strategic plan and take the necessary measures to make the most of the rebound in demand, both for the summer and in the longer term.
Rebuilding and developing the network with:
- the reopening of most of the pre-pandemic network routes
- codeshare agreements with WestJet (bookings now open) and Porter (opening scheduled for the fall)
- new destinations (particularly Los Angeles and San Francisco)
- new direct flights (such as Montréal-Amsterdam or Québec City-London)
- improved network operations through the addition of connections on existing routes to and from Europe and the United States (such as Paris-San Francisco or London-Los Angeles with a stopover in Montréal)
- numerous additional routes possible via the connectair by Air Transat platform through virtual interlining agreements with eight airline companies offering over 245 destinations in Europe, North Africa, the Middle East, Central and South America, and Canada
With all these initiatives, the Corporation will offer more than 1,200 itineraries (including 550 with Transat) in summer 2022, compared with about 500 in 2019. |
