Transat AT plans to resume flights on July 30 with a leaner operation that will see the company consolidate its fleet and focus less on tour operating and travel agency services. At the time, the company says it is optimistic about the winter season, not least because of a recent surge of bookings approaching pre-pandemic levels.
The resumption of service for the travel company comes after having suspended operations on Jan. 29 when Ottawa requested a halt of travel to Mexico and the Caribbean, as well as the adoption of new quarantine measures and testing requirements.
In the meantime, a proposed takeover by Air Canada was terminated when opposed by European regulators and quarterly results for the period ended April 30 produced a net loss of $69.6 million.
Revenue for what was the company’s second quarter also totalled a meagre $7.6 million, down from $571.3 million in the same quarter last year.
In call with analysts on Wednesday, Transat CEO Annick Guerard said the company had seen a mass of travellers booking last week and expects more activity after the federal government announced Wednesday that fully vaccinated travellers would likely no longer have to quarantine on return to Canada as soon as early July.
Guerard said bookings for the winter season in the past week had matched levels in 2018 and 2019, prompting her to state: “We are pretty excited around that, but again we want to be careful.”
The new CEO, who replaced retiring co-founder Jean-Marc Eustache in late May, also called on the government to produce a comprehensive reopening plan for international travel so it can plan operations for the coming months.
Meanwhile, Guerard said Transat is taking steps to become a leaner company, more focused on its airline business, with less of a focus on tour operating and services as a travel agency. It will also plan to discontinue the hotels that it owned in certain destinations.
The airline has also let go of some older aircraft, including Boeing 737s and Airbus A310s, in an effort to consolidate its fleet to newer models of Airbus A330s and A321s that will lower operating costs. It will also end winter aircraft leasing and increase a focus on transborder routes to ensure aircraft are fully utilized.
On an adjusted basis, Transat says it lost $103.3 million or $2.74 per share for the quarter, compared with an adjusted loss of $38.8 million or $1.03 per share a year ago. However, Transat’s stock has seen a nearly 30% increase over the last month, which analyst Benoit Poirier of Desjardins Capital Markets attributed to ongoing discussions with businessman Pierre Karl Peladeau about a potential takeover.
Transat said Thursday those talks are continuing.
“Overall, while we believe Transat’s strong exposure to (visiting friends and relatives) travel will be a key differentiator for the recovery of air travel, we do not expect the company to participate fully until the latter part of the year given its operations are grounded,” Poirier wrote in a report.
Guerard said Transat will move cautiously while ramping up operations, and it will not offer as many seats as usual this winter.
“We don’t want to plan an operation that is too high, because we never know what’s going to happen. We don’t want to go through what happened last year” when the airline was forced to cancel operations after reopening mid-pandemic, she said, adding, “We are being prudent and going day-by-day progressively.”