Transat AT plans a gradual resumption of operations as of July 30
Transat AT Inc. is optimistic about the upcoming winter season as the tour operator and airline aim to become a leaner business with lower operating costs after flights resume scheduled for July 30.
The travel agency suspended operations on January 29 after Ottawa called for travel to Mexico and the Caribbean to be suspended as well as new quarantine measures and testing requirements.
Quarterly results for the period ended April 30 reflect the company’s lack of operations, with a net loss attributable to shareholders of $ 69.6 million or $ 1.84 per diluted share for the quarter.
The result compares to a loss of $ 179.5 million or $ 4.76 per diluted share a year earlier at the start of the pandemic in Canada.
The company’s second quarter revenue totaled $ 7.6 million, compared to $ 571.3 million in the same quarter last year.
Transat’s new CEO Annick Guérard said the company that includes Air Transat had already seen a mass of travelers book in the previous week and expects more activity after the federal government announced on Wednesday that fully vaccinated travelers would no longer have to self-quarantine upon their return to Canada.
Guérard said bookings for the winter season over the past week equaled pre-pandemic levels in 2018 and 2019.
“We’re pretty excited about this, but again, we want to be careful,” Guérard said on a conference call with analysts.
She called on the government to produce a full reopening plan for international travel so it can plan operations for the coming months.
Guérard highlighted the continued closure of the border for non-residents, saying she hopes the border will reopen as vaccinations increase.
Meanwhile, Guérard said Transat was taking steps to become a leaner company, more focused on its airline business, with less emphasis on organizing travel and serving as a travel agency.
He also plans to cease the hotels he owned in certain destinations.
At the same time, the airline has phased out some older aircraft, including Boeing 737s and Airbus A310s, in an effort to consolidate its fleet with newer models of Airbus A330 and A321 that will lower operating costs.
It will also end the leasing of planes in winter and put more emphasis on cross-border routes to ensure planes are fully utilized.
On an adjusted basis, Transat claims to have lost $ 103.3 million or $ 2.74 per share for the quarter, compared to an adjusted loss of $ 38.8 million or $ 1.03 per share a year ago .
However, Transat’s stock has seen an increase of nearly 30 percent in the past month, which Desjardins Capital Markets analyst Benoit Poirier attributed to ongoing discussions with businessman Pierre Karl. Péladeau about a possible takeover.
Transat said Thursday those talks were continuing and followed the termination of an Air Canada takeover, after the European Commission said it would not approve the deal.
“Overall, while we believe that Transat’s strong exposure to travel (visiting friends and relatives) will be a key differentiator for the resumption of air travel, we don’t expect the company to participate fully before the end of the year, given that its operations are anchored to the ground. , he wrote in a report.
Guérard said Transat will act with caution as its operations ramp up and will not offer as many seats as usual this winter.
“We don’t want to plan an operation that’s too high because we never know what’s going to happen. We don’t want to relive what happened last year,” when the airline was forced to cancel its operations after it reopened in mid-year. pandemic, said Guérard
“We are cautious and are making progress day by day.”
Companies in this story: (TSX: TRZ)
Salmaan Farooqui, The Canadian Press