Following a challenging winter, Transat A.T. Inc.’s 3rd quarter results were boosted by strong transatlantic business. The Canadian travel giant’s margins improved by $26.7 million primarily due to performance in that market. Revenue for the quarter ended 31JUL came in at $867.3 million, compared with $819.4 million for the same period of 2009 reflecting an increase in the number of travellers.
Before non-cash and non-operating items, Transat reported an adjusted after-tax income of $26.8 million for the third quarter of 2010, compared with $7.0 million in 2009. Net income of $20.9 million was down from 2009’s $31.0 million result due mainly to the corporation’s 2009 gain of $30.6 million related to fuel hedging.
“We are satisfied with these results. We recorded an increase in the number of travellers, good load factors, as well as higher selling prices on the transatlantic market. International tourism remains resilient, people continue to show an inclination to travel,” said Jean-Marc Eustache, President and Chief Executive Officer.
The lower value of the euro and pound sterling affected Transat’s European business units negatively but European operations margins were up $5.4 million mainly due to higher volumes and prices at Canadian Affair.
For the fourth quarter, on the transatlantic market, Transat’s capacity is approximately 15% higher than in 2009. The Corporation’s load factor is similar to last year at the same date, with bookings higher in Canada and Europe. Average revenue per booking in Canadian dollars is higher to that of 2009 at the same date, despite the weakness of European currencies against the Canadian dollar.
From Canada to sun destinations, capacity is similar to 2009, bookings and load factors are slightly higher. However, at the present time, and as was the case for the past winter season, selling prices remain under strong pressure, due to intense competition in the marketplace.
For the fourth quarter, if the trend remains unchanged, Transat anticipates higher revenues and significantly higher margin compared with the previous year.
The company says it is too early to comment on the winter 2011. At this moment, capacity and bookings are higher than last year.