Air Transat aircraft are seen on the tarmac at Montreal-Trudeau International Airport in Montreal, on Wednesday, April 8, 2020. THE CANADIAN PRESS/Paul Chiasson
MONTREAL – Transat A.T. Inc. reported earnings well below expectations on Thursday, as fears of a possible strike by flight attendants ate away at bookings throughout the quarter, the tour operator said.
The company swung to a loss of $61 million in the three months ended Jan. 31, worse than the $56.7-million loss of the same period a year earlier and despite a revenue boost of nearly 18 per cent.
“Transat’s first-quarter results reflect sustained demand for leisure travel,” said CEO Annick Guérard in a release, noting a “solid” uptick in traffic to sun destinations.
“However, the persisting speculation of a strike by flight attendants starting last November clearly affected bookings and yield for the winter season.”
The Montreal-based company’s 2,100 flight attendants voted 99 per cent in favour of a strike mandate that month and twice rejected tentative deals before approving a new collective agreement in late February.
Guérard also said that costs related to temporary plane leases due to engine issues and lower profit margins caused by “heightened consumer price sensitivity … as well as fierce competition” in Toronto further hurt earnings. Air Transat’s seat capacity ramp-up of 25 per cent exceeded its passenger increase of 20 per cent.
As a result, the company is scaling back plans to bolster capacity by 19 per cent, opting for a more modest 13 per cent increase.
The travel company said revenue amounted to $785.5 million in its first quarter, up from $667.5 million a year prior.
On an adjusted basis, Transat lost $2.11 per share compared with an adjusted loss of $1.62 per share a year ago. The result fell below analysts’ expectations of an adjusted loss of $1.22 per share, according to financial markets data firm Refinitiv.
This report by The Canadian Press was first published March 14, 2023.
Companies in this story: (TSX:TRZ)
