Transat has announced the intended sale of land in Mexico to a resort company for USD $38 million.
The sale is part of the travel company's plan to focus on its airline business as it tries to return to profitability after more than three years of losses, Transat said in a release. On 08JUN, Transat released its Q2 quarterly earnings report, as Open Jaw reported, revealing a decrease in losses attributed to strong travel demand and a positive trajectory in prices.
According to the Globe and Mail, the deal will bring the company annual savings of about CAD $6 million, “which is significant,” Desjardins analyst Benoit Poirier said in a note to investors. “Transat is starting to approach a turning point,” Poirier added.
The company noted that it bought the property in Puerto Morelos in 2018 as part of the development of a hotel subsidiary, which it discontinued in 2021. Proceeds of the sale will be used to repay debt, which totalled CAD $1.92 billion at the end of its second quarter on 30APR, reports CTV News.
The resort company who purchased the property, Finest Resorts, is part of The Excellence Collection and owns and operates Finest Playa Mujeres in Cancun, Mexico, and Finest Punta Cana, in the Dominican Republic.
The sale is expected to close in Transat's fourth quarter.
