Could Transat still be purchased?
“This is an option that we will consider, along with that of continuing under the present conditions,” President and CEO Jean-Marc Eustache said Thursday at an annual meeting of shareholders. “In the short term, an opportunity to move in this direction could be presented by Pierre-Karl Péladeau’s expressions of interest, and we will have to determine in the near future whether this possibility is in the best interest of all stakeholders.”
The statement came hours after the announcement that Transat had secured loans from the Government of Canada of up to $700 million through the Large Employer Emergency Financing Facility (LEEFF).
As well, up to $310 million, provided for seven years at a reduced interest rate, will allow the operator to repay customers for travel credits issued during the pandemic.
“We understand how important this is to our customers and we are pleased that this solution, which we have been fervently seeking for a long time, has been achieved,” Eustache said.
“Because we now have the cash flow to look confidently to the future, we will be able to focus our efforts on the recovery and on our strategic plan for the coming years, with a view to rebuilding a strong and profitable company for the long term.”
The simplification of its structures, the refocusing on the airline business and the reduction of some expenses will allow Transat to benefit from lower fixed costs and greater flexibility.
An important step in that direction is the undertaking to reduce the airline’s fleet to two aircraft types and optimize its network.
“This will significantly reduce the impacts of seasonality and increase the use of our aircraft, two major weaknesses of the pre-pandemic Transat. Adjusting our revenue management and making better use of technology will complete the picture. However, it is understood that we will continue to strictly manage our costs. The collaboration of our suppliers is crucial to the recovery of Transat.”
“Efforts in this direction had already been initiated before the pandemic and were beginning to show results. But some initiatives — such as fleet simplification and the core use of the A321neoLR or the elimination of unprofitable city-pairs — have been accelerated during the past year. Other initiatives, such as the reduction of office leases, have been added and the company continues to try to adapt to a new competitive landscape.”