By The Canadian Press on December 14, 2023.
MONTREAL – Transat AT Inc. eked out a profit in its latest quarter, which marked a sharp improvement from its loss a year ago as the travel company continued to ramp up flights.
On Thursday, the Montreal-based carrier reported net income of $3.2 million for the three months ended Oct. 31 compared with a loss of $126.2 million in the same period last year.
Higher prices to European destinations helped drive a one-third jump in revenues year over year. The $764.5 million in sales for the quarter, up from $573.1 million a year ago, also sat 10 per cent above 2019 levels despite there being seven per cent less capacity and a similar percentage of seats filled, Transat said.
“Driven by a strong execution of its strategic plan, Transat has solidified its positioning in the Canadian leisure travel industry,” Transat CEO Annick Guérard said.
“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.”
Even as Canadians splurge on leisure more reluctantly amid higher interest rates and inflation, Transat plans to increase flight capacity by 19 per cent next year through more airplanes and better “fleet utilization.” The planes will be put toward greater frequency on some routes, year-round service on others as well as some new destinations, the company said.
In its coming financial year, Transat is targeting a profit margin between 7.5 per cent and nine per cent for earnings before interest, taxes, depreciation and amortization, exceeding historical levels.
In a separate announcement, Transat said it has signed a deal to sell its 50 per cent stake in the Marival Armony Luxury Resort near Puerto Vallarta in Mexico to its co-owner, the owner of the Marival Group, for US$15.5 million. Proceeds from the sale will be used to repay debt.
The company also announced it had reached an agreement in principle to renew a collective agreement with the union representing its flight attendants. Details of the deal, subject to a vote by members of the Canadian Union of Public Employees, will be presented to members in the coming days, Transat said.
On Thursday, the tour package company reported its profit amounted to eight cents per share for its fourth quarter compared with a loss of $126.2 million or $3.32 per share in the same quarter last year.
On an adjusted basis, Transat said it earned 41 cents per share last quarter versus an adjusted loss of $2.00 per share a year ago.
This report by The Canadian Press was first published Dec. 14, 2023.
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