MONTREAL — Faced with another winter of overcapacity and discounting, Transat A.T. saw profit plunge to $6.2 million for the quarter ended April 30 compared with net income of $42.2 million for the same quarter in 2009.

Revenue fell 6.1% to $1.06 billion from $1.12 billion in 2009.

“Both the quarter and the first six-month period have seen intense competition, which continues to squeeze margins and benefit the consumer. Our operating expenses are under control and our cost-reduction efforts have been successful,” said Jean-Marc Eustache, president and CEO. “In addition, we recorded unexpected costs of $4 million as a result of volcanic activity in Iceland.”

The decrease in revenue is attributable to lower selling prices, caused by intense competition, and the effect of a strong Canadian dollar against the euro and the pound sterling. As a percentage of revenues, the corporation’s margin decreased from 3.5% in 2009 to 0.8% in 2010. The decrease stems from lower average selling prices, the result of overcapacity in the marketplace, mainly in Canada, partly offset by lower costs.

Revenues of the North American business units, which are generated by sales in Canada and abroad, decreased by $27.5 million, or 3.0%, compared with the same period in 2009. The decrease is attributable to a decline in average selling prices, partly offset by an increase in the number of travellers. North American business units posted a margin of 1.5%, compared with 4.2% in 2009.

The outlook for the summer on the Canada-Europe market sees Transat’s capacity approximately 15% higher than for the summer of 2009. The company’s load factor is slightly higher than last year at the same date, as bookings are higher in Canada and in Europe. In local currency, prices are higher in both Canadian and European markets.

From Canada to sun destinations, capacity, bookings and load factors are similar to 2009. As of today, and as was the case for the past winter season, selling prices remain under strong pressure, due to overcapacity in the marketplace, said Eustache.