Transat AT plans to “stay the course” with its 2022 business plan, even as the airline says it registered a significant first-quarter loss and is seeking additional government funding.
The travel company says its loss for the quarter ended Jan. 31 totalled $114.3 million compared with a loss of $60.5 million a year earlier – results it blamed on the omicron surge in COVID-19 cases and travel restrictions put in place by Ottawa that limited its revenue growth.
However, revenue for the quarter amounted to $202.4 million, up from $41.9 million.
Transat says revenue growth was hurt by a sharp decline in demand and an increase in booking cancellations following the emergence of the omicron variants, forcing it to cancel nearly 30% of its flights scheduled for January.
On an adjusted basis, Transat says it lost $2.53 per share for the quarter, compared with an adjusted loss of $2.89 per share for the same quarter a year earlier.
Despite the loss, Transat president and CEO Annick Guérard remains optimistic going forward.
“While we were in the midst of a strong recovery, with November and December results matching our targets, the emergence of the omicron variant brought our sales to a temporary halt between mid-December and early February. Subsequently, and particularly after the easing of restrictive measures at the borders, bookings picked up again, for both winter and summer, which augurs well for the coming months,” she said.
“We, therefore, intend to continue with our initial strategic plan and stay the course for the summer. Our recovery plan has allowed us to recall approximately 500 employees since the start of November and we are delighted to see that many of our customers in Canada and Europe are eager to travel after two years of the pandemic.”
Guérard says the airline’s new code-sharing agreement with Porter Airlines, announced March 8, also demonstrates the progress made towards our longer- term strategic goals.
“The deferral of certain terms of our financing under the Large Employer Emergency Financing Facility, as well as the securing an additional $43.3 million for refunding travellers, will facilitate our recovery following the resurgence of the pandemic,” she says, adding, “In the short term, our priority is to protect our cash flows and access the liquidity needed to get through this period of uncertainty.
“Although we are in recovery, the impacts of COVID-19 are still being felt and the geopolitical situation is constantly changing. As we will remain in a cash burn situation for the coming months, we are also in discussions with the federal government for additional funding.”
Transat says that by summer it will be operating at 91% of 2019 capacity levels across all markets.