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MONTREAL — Transat AT Inc. has reported a loss in its latest quarter compared with a profit a year ago as it was hit by rising fuel prices.
The company says it lost $4.0 million or 11 cents per diluted share for the quarter, compared with a profit of $26.6 million or 72 cents per share in the same quarter last year.
Excluding non-operating items, Transat reported an adjusted loss of $3.0 million or eight cents per share for the quarter compared with an adjusted profit of $26.9 million or 73 cents per share a year ago.
Revenues in what was the company’s third quarter totalled $696.6 million, down from $733.2 million in the same quarter in 2017 when its results included $77.0 million from its Jonview subsidiary, which was sold last November.
Transat says the number of travellers was up 11.5% in the transatlantic market, while capacity increased by 13.9%.
The number of travellers was up 7.9% in the sun destinations market while capacity rose 7%.
“Like most of our competitors, we’re affected by rising fuel prices, which impacted our summer results as we had forecasted in mid-June. Prices always take a certain time to adjust. We are still confident that we will meet our long-term targets, while Air Transat was just named the world’s best leisure airline by Skytrax,” said Transat President and CEO Jean-Marc Eustache.
“During the quarter, we opened our hotel division’s headquarters in Miami and identified attractive opportunities, some of which should materialize soon.”
On the outbound transatlantic market, for the period from August to October 2018, Transat’s capacity is higher by 14%. To date, 84% of the capacity has been sold, load factors are 1.1% higher than those of summer 2017 and selling prices of bookings taken are 2.7% lower.
Higher fuel costs, combined with currency variations, will result in a 7.3% increase in operating costs if aircraft fuel prices remain stable and the dollar remains at its current level against the U.S. dollar, the euro and the pound, says Transat. The price of aircraft fuel increased by 11% between the beginning of April and mid-June.
In the summer sun destinations market, 75% of Transat’s capacity marketed has been sold. To date, unit margins are 7.2% lower than those recorded in 2017, considering the impact of higher fuel prices.
Looking ahead to winter 2018/2019, Transat’s capacity is higher by 3% than the previous year. To date 25% of that capacity has been sold and load factors are ahead by 2.7%.
With files from The Canadian Press