Transat welcomed key trade partners to a 'coming-out' party in one of its hangars at Toronto Pearson Wednesday. Visitors were invited to get up close and personal with one of Air Transat's shiny new A321neo LR aircraft, a model that the company is betting will lead it to a brighter future.
We hesitate to call it a post-pandemic gathering just yet, but 'coming-out party' seems to fit, because Air Transat is emerging from more than three years of upheaval and uncertainty, which began with Air Canada's attempted purchase of the company.
At the time, and not long prior to the pandemic, Transat had about $500 million liquidity and no debt. Three years later, as Chief Sales & Marketing Officer Joe Adamo put it, the company is "leveraged to the hilt."
Transat has abandoned its ambitions to get into the capital-intensive hotel business, and made the decision to focus on three business lines - airline, tour operator and retail travel network.
"We're still standing after three tumultuous years," Adamo told the gathering. "Like a lot of you we've had to rebuild our company in every way. We are a very different company and we're confident but cautious for 2023. The last three years have shown that being cautious is the right way to be."
Adamo says the focus right now is "stabilization and transformation." The new Transat is putting a much stronger emphasis on Eastern Canada, with "abundant offerings in Ontario, Quebec and the Maritime provinces this winter.
"It's absolutely the right thing to do to put focus on Eastern Canada. We need to have scale to be efficient," Adamo added.
There are significant bright spots looking forward. With the arrival of a dozen of the A321neo planes, Transat's fleet is 40% younger than at the start of the pandemic. There are five more scheduled to arrive with firm orders.
Adamo says Air Transat needs to do a better job of feeding passengers into its YYZ and YUL hubs, and is looking to airline partnerships to help fill the hopper. Once such relationship is with Porter Airlines, which is now codesharing on domestic flights to and from Halifax and Toronto City (YTZ), and select Air Transat flights to and from Montreal (YUL).
Porter has big plans for expansion within North America, so Adamo says the relationship will grow and feed more passengers into TS's European routes.
The shift from four to two compatible aircraft types - with very similar cockpits - gives Transat the ability to boost utilization - the number of hours its planes spend in the air making money. That's critical to profitability, as aircraft leasing is the airline's biggest cost after labour and fuel.
With almost all travel and flight restrictions lifted and a robust plan for winter flying, Air Transat has high hopes that the 2022-2023 travel season will be the start of a successful recovery.
"The winter is shaping up to be quite good," Adamo said. "Prices are up. It's good for us. It's good for you. And it's absolutely necessary."
The Transat sales boss and president of retail network TDC says work is ongoing to improve a call centre situation where "the quality of service is clearly unacceptable."
"The pandemic laid bare the inefficiencies of the legacy systems we've been using for too long. But the average wait times are getting better and we are deploying every resource necessary to be above water. We will get back to acceptable service levels."
Adamo and the Transat sales team thanked travel partners for their ongoing support. "We've all been to hell and back," he said.
Topics From This Article to Explore
