Transat released its Q2 quarterly earnings report on 08JUN, revealing a decrease in losses attributed to strong travel demand and a positive trajectory in prices.
The company's loss narrowed to C$29.2 million, or C$0.76 a share, from a loss of C$98.3 million, or C$2.60, in the same period last year. On an adjusted basis, Transat had a loss of $0.21 a share, compared with $2.95 per share in 2022.
The financial picture is positive with Transat's adjusted operating income for the quarter nearly 40 per cent higher than the same period in 2019, showcasing a "solid performance" despite the ongoing challenges faced by the travel industry.
The airline and tour operator recorded revenues of $870.1 million in Q2. The adjusted operating income (adjusted EBITDA) stood at $56.1 million, while the operating income (EBIT) reached $18.7 million. These results have contributed to Transat's positive financial position, with unrestricted liquidity amounting to $723.6 million as of 30APR.
The company has also seen a substantial increase in customer deposits for future travel which rose by 38 per cent compared to pre-pandemic levels in 2019, "reflecting the rebound in demand and higher average selling prices."
One of the primary factors driving Transat's results is the steady demand for leisure travel, Transat’s core market. The high volume of activity in this sector has led to increased prices, with a 15 per cent rise at the beginning of the quarter and nearly 24 per cent at the end compared to the same period in 2019.
Strong Summer
Looking ahead, Transat said it is entering a "dynamic summer season" with over 60 per cent of its capacity already sold. The company plans to deploy 89 per cent of its 2019 capacity, the majority (80 per cent) headed for Europe, traditionally the operators most lucrative market.
By leveraging the most profitable routes, Transat said it aims to capitalize on the positive market conditions.
"The combination of strong demand and upward pricing will allow the Corporation to cope with a cost environment that remains generally higher and volatile," Transat said in a release.
The third-quarter results will be announced on 07SEPT 2023.
