The head of Transat A.T. Inc. says fallout was “limited” from a strike threat by its pilots and that the company continues to benefit from Canadians’ turn away from U.S. travel, paving the runway for growth in the new year after the tour operator turned its first annual profit since 2018.
“Demand for leisure travel remains solid, particularly for south destinations driven by the continued shift away from U.S. leisure markets towards the Caribbean and Mexico,” said chief executive Annick Guérard on a conference call with analysts Thursday.
The number of Canadians returning from overseas – rather than America – rose nearly 12% year-over-year to 1.1 million in November, according to preliminary figures from Statistics Canada. Meanwhile, return trips by air from the United States dropped more than 19%.
As demand for flights to Florida, Las Vegas and other American cities continues to plummet, the airline is seeking out destinations farther afield, and routes from new Canadian gateways.
Air Transat, for example, launched a slew of inaugural routes last week: its first-ever non-stop flight between Montréal and Guadalajara, Mexico, non-stop flight between Québec City and Martinique Aimé Césaire International Airport (FDF) on the 14th, and Istanbul (IST) and Georgetown, Guyana (GEO) from Toronto on Dec. 16.
Upcoming inaugural routes include Accra in Ghana, Agadir in Morocco, and Dakar in Senegal, as well as one on Thursday between Toronto and Tirana, Albania, as demand for cheaper getaway spots ticks up.
“Targeted network expansion across destinations in Africa, Europe and South America, combined with fewer grounded aircraft and network optimization, should result in increased capacity for 2026” – between 6 and 8% – said Guérard.
Transat’s annual financial result came despite a dip in revenues and traffic volumes in the company’s fourth quarter, which saw a $12.5-million loss versus net income of $41.2 million in the same period the year before.
Last week, Transat narrowly avoided a costly work stoppage when it reached a last-minute tentative deal with the union representing its 750 pilots that boosted their wages by more than 50% over five years.
Guérard noted that Transat has renegotiated all major collective agreements through 2027 and beyond, paving the way for relative labour peace at the airline.
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