Air Transat aircraft are seen on the tarmac at Montreal-Trudeau International Airport in Montreal, on Wednesday, April 8, 2020. Transat AT Inc. reported a $56.6-million loss in its latest quarter compared with a loss of $114.3 million a year earlier as its revenue more than tripled. THE CANADIAN PRESS/Paul Chiasson
MONTREAL – The head of Transat AT Inc. says travel demand reached heights comparable to 2019 in its first quarter, even as higher airfares and the threat of recession risked dampening customers’ enthusiasm.
“Transat is on an upswing and is headed for a return to profitability,” CEO Annick Guérard said in a statement alongside the travel company’s earnings release Thursday.
“Resilient demand for travel is supporting prices and helps us deal with the pressure on operating costs.”
Transat said the pace of bookings is similar to 2019 and strong demand is fuelling price hikes, helping the carrier cover higher costs.
“Despite concerns of a recession, the North American airline sector is benefiting from a counter-cyclical recovery with pent-up demand for travel,” the company said as part of an investor presentation.
“While it is too early to have a complete picture for the summer, the winter trends seem to be continuing into summer 2023.”
It projected an adjusted operating income margin of between four and six per cent.
The upbeat tone comes after the company’s 13th straight quarter of net losses, though they were the best results since the third quarter of 2020.
Transat reported a $56.6-million loss in the quarter ended Jan. 31 compared with a loss of $114.3 million a year earlier as its revenue more than tripled.
The loss amounted to $1.49 per diluted share for the quarter ended Jan. 31. compared with a loss of $3.03 per diluted share a year earlier.
First-quarter revenue totalled $667.5 million, up from $202.4 million a year earlier when the company had to scrub nearly 30 per cent of its scheduled flights as a result of booking cancellations following the emergence of the Omicron variant.
On an adjusted basis, Transat says it lost $1.62 per share in the quarter compared with an adjusted loss of $2.53 per share in its first quarter last year.
Those results came in 20 per cent above analysts’ expectations, which had predicted an adjusted loss of $2.02 per share and $662.5 million in revenue, according to estimates compiled by financial markets firm Refinitiv.
This report by The Canadian Press was first published March 9, 2023.
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