MONTREAL — Transat has issued a clarification of a report by The Canadian Press that said the company has pledged to raise prices next summer following a spike in fuel costs.
Published on Sept. 13, the report “mistakenly gave the impression that Transat had voluntarily decided not to increase prices during the summer of 2018 in response to a rise in fuel costs” while its competitors did raise prices for that very reason.
The Canadian Press also reported that Chief Operating Officer Annick Guérard said the company “opted not to join” competitors in raising prices. But according to the transcript of Transat’s Third Quarter 2018 conference call, Guérard, in fact, said: “We haven’t been able to see any increase on pricing for the summer.”
According to an official statement by Transat, the plan to increase pricing next summer should not have been construed as a “vow” or a “pledge”. Rather, the move to raise prices is not only voluntary, but also an adaptation to competitive conditions.
The CP article went onto imply that Transat has kept prices low in a market that “climbed 28% overall in Canada in the first half of 2018.”
This, said Transat, was misleading, as it did not see any significant increase in prices on its routes, and has said as much in its investor-relations communications.
“If prices have indeed increased by 28%, this no doubt reflects price changes in markets in which Transat is not active, and/or in fare classes specific to competitors (ie. First Class, Business Class) and not Transat,” the company wrote.
Moreover, the 28% figure was drawn from a Statistics Canada table of the non-seasonally-adjusted monthly Consumer Price Index (CPI). The table is accompanies by a disclaimer, which states: “Users are reminded that the methodology for the air transportation index was updated in March 2018 as part of the regular review of the CPI methodology. Interpretation of the 12-month price change indicator should be made with caution, particularly in the year following the implementation of the new methodology.”