An optimistic Transat says it is on track for a winter season matching pre-pandemic levels. The news comes as the company announced its third quarter results, with a smaller loss than in 2021 and a profitable month in July -- the company's first in more than two years.
"The recovery emerging at the end of the last quarter has been confirmed in recent months. With our prudent planning and our teams' exceptionally high quality execution, we were able to deploy virtually all of our programs, with continuously improving load factors," said Annick Guérard, President and CEO.
"The pace of sales is currently very comparable to 2019," Guérard added. "Although the quarterly results are still affected by the costs of resuming operations, July was our first profitable month in more than two years, setting the stage for improved results. The strong pricing this quarter also partially absorbed the increase in fuel costs, the adverse effect of which is likely to persist for some time."
Guérard says Transat's current cash position, combined with new financing obtained during the quarter, gives the company the required flexibility for the future.
Compared with 2021 (a quarter with virtually no operations), Transat's revenues increased by $495.8 million for the quarter ended July 31, 2022. Compared with 2019, quarterly revenues were down $190.6 million or 27%. Capacity offered was 82% of that deployed in 2019 across all programs and 68% for Europe, the main program during this period.
Overall, the number of travellers was down 24% for the third quarter compared with 2019. The gradual recovery of demand combined with higher fuel prices also contributed to the increase in average selling prices compared with 2019. The increase in average selling prices is approximately 8% for the Europe program and 26% for the sun program.
Operations resulted in an operating loss of $93.2 million, an improvement of $5.2 million compared with the $98.4 million loss in 2021. The improvement was restrained by a 112% surge in fuel prices (or $103.3 million) during the quarter, compared with 2021. Transat reported an adjusted operating loss of $57.8 million, a deterioration of $6.9 million, compared with $50.9 million in 2021.
Transat took delivery of two A321LRs during the quarter and is expecting five more of these aircraft in 2023 and 2024. In recent days, the company also finalized its first order since 2018, for four A321XLRs, including three firm orders for delivery in 2025-2026 and an option for 2027.
Transat says the current situation is showing encouraging signs in terms of bookings as a last-minute booking trend persists. After the low reached during the Omicron wave, load factors have largely improved in recent months. Selling prices of bookings for the summer season have been steadily increasing since the start of spring across all programs.
Looking ahead to winter, Transat says it is too early to draw any conclusions. But in the sun destination program that makes up the lion's share of its winter program, Transat's capacity is the same as 2019 and 75% higher compared with 2021/2022. To date, and overall, load factors are comparable to 2019 levels while prices are higher.
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