The head of Transat A.T. Inc. says Canadians’ appetite for travel remains unsated even as pocketbook worries grow amid a trade war with the United States. Travellers continue to book transatlantic flights with the tour company, says CEO Annick Guérard, though she acknowledges demand for American destinations dropped sharply over the past few months.
“Besides the US market … we have not seen – yet – other negative impacts on our booking curve following tariff announcements,” Guérard said.
“We are well aware that the current environment is affecting overall consumer confidence, and this could eventually affect travel demand. But we haven’t seen any impact over the last weeks.”
Transat currently flies to only two US destinations, in Florida. But those nearly 300 trips per month, while shorter and lower priced, still make up nearly 12% of its total flights.
The company also opted to cut capacity to the state by about 10% last month as bookings declined amid the backlash to tariff threats levelled by US President Donald Trump as well as a weak loonie, according to figures from aviation data tracker Cirium.
The mood of uncertainty hanging over the North American economy may result in more last-minute bookings as customers consider whether to spend their weaker Canadian currency on travel, or if they want to visit a country whose leader has launched annexation threats and 25% tariffs on billions of dollars in Canadian goods.
“People potentially will hesitate before making any bookings,” Guérard said, pointing to the “unstable economic environment.”
But, “Things are looking good, for now” — with bookings, at least, she added.
Planes are another story. Air Transat’s fleet continued to be deprived of six to seven planes over the winter, depending on the week. The airline is one of many hit by a recall of turbofans from aircraft engine giant Pratt & Whitney.
“We continue to actively manage the severe negative impact caused by Pratt and Whitney GTF engine issues,” said Guérard, adding that she expected the groundings to persist through the year.
Transat reported a net loss of $122.5 million in its first quarter, double the $61-million in losses from the same period the year before. However, its adjusted net loss of $75 million marked a mild improvement from a $76-million loss a year earlier. Unfavourable foreign exchange rates help explain the worse performance on net losses, the company said.
Revenue for the quarter rose nearly 6% year-over-year to $829.5 million from $785.5 million.
The increase came as traffic expressed in revenue passenger miles – a metric tallying the number of miles travelled by paying customers – rose 1% year-over-year.
If this article was shared with you by a friend or colleague, you may enjoy receiving your own copy of Travel Industry Today with the latest travel news and reviews each weekday morning. It’s absolutely free – just CLICK HERE.