Transat has announced its first quarter results for the year. The Omicron variant of the COVID virus put a dent in anticipated recovery. And while the airline and vacation company is projecting confidence in a solid year, the company's leadership is hinting it may go back to Ottawa for more support.
"While we were in the midst of a strong recovery, with November and December results matching our targets, the emergence of the Omicron variant brought our sales to a temporary halt between mid-December and early February,” said Annick Guérard, President and Chief Executive Officer of Transat in a media statement accompanying the results.
“Subsequently, and particularly after the easing of restrictive measures at the borders, bookings picked up again, for both winter and summer, which augurs well for the coming months."
In the first three months of 2022, Transat saw:
- Revenues of $202.4 million; an
- Adjusted operating loss of $36.4 million (operating loss of $73.8 million); and an
- Adjusted net loss of $95.3 million (net loss of $114.3 million).
Those are big improvements from the mid-pandemic first quarter of 2021.
Compared with 2021, revenues were up $160.5 million - nearly a 400 per cent increase. Transat says that resulted mainly from a rise in the number of travellers combined with a slight increase in average selling prices. However, compared with the same quarter in 2019, revenues in Q1 were down 68.7 per cent.
Transat’s operating loss of $73.8 million in the first quarter this year, compared with $98.0 million in 2021, shows an improvement of $24.2 million.
“We therefore intend to continue with our initial strategic plan and stay the course for the summer,” Guérard’s statement continued.
Transat reported “sharp decline in demand and massive booking cancellations” in the first quarter “following the emergence of the Omicron variant during the quarter and the new restrictive measures put in place by the federal government on December 15, 2021,” resulted in Transat cancelling nearly 30 per cent of JAN scheduled flights.
Nonetheless, “Our recovery plan has allowed us to recall approximately 500 employees since the start of November and we are delighted to see that many of our customers in Canada and Europe are eager to travel after two years of the pandemic. Our code-sharing agreement with Porter Airlines announced on Tuesday also demonstrates the progress made towards our longer term strategic goals,” Guérard said.
"The deferral of certain terms of our financing under the (federal government’s) Large Employer Emergency Financing Facility ("LEEFF"), as well as the securing an additional $43.3 million for refunding travellers, will facilitate our recovery following the resurgence of the pandemic,” Transat’s CEO added.
“In the short term, our priority is to protect our cash flows and access the liquidity needed to get through this period of uncertainty,” said Guérard, before hinting that Transat may seek new government financial support.
“Although we are in recovery, the impacts of COVID-19 are still being felt and the geopolitical situation is constantly changing. As we will remain in a cash burn situation for the coming months, we are also in discussions with the federal government for additional funding."
