Transat A.T. reports 5.3% increase in revenue in Q1 results

Transat A.T. reports 5.3% increase in revenue in Q1 results

MONTREAL — Transat A.T. Inc.’s first quarter results show a marked improvement from last year, and if trends continue, the company expects to maintain gains at the end of winter.

The Corporation posted revenues of $725.8 million, compared with $689.3 million in 2017, an increase of $36.5 million (5.3%). This improvement was driven by growth in the number of travellers (6.2%) in the Sun destination market – its main market for the period – and of 20.3% in the transatlantic market. In addition, average selling prices rose slightly across all markets.

“During this quarter, we continued the repositioning started last year by announcing the disposal of Jonview for $48.4 million, and the appointment of Jordi Solé as President of our new hotels division,” said Jean-Marc Eustache, President and Chief Executive Officer of Transat. “The disposals made during the past 18 months generated $327 million in total for our hotel investments. We’re also continuing our work on revenue management and the fleet.”

Transat A.T.’s operations resulted in an adjusted operating loss of $31.0 million, compared with $37.1 million in 2017. The $6.1 million improvement resulted largely from an increase in the number of travellers combined with higher average selling prices and the favourable foreign exchange effect, which led to a $13.3 million decrease in operating expenses for the quarter. However, this improvement in operating results was mitigated by $9.0 million in maintenance costs related to one-time events.

On a comparable basis, excluding the sale of Ocean Hotels and Jonview, the adjusted operating loss decreased by $9.1 million compared with the previous year.

The Corporation’s second quarter outlook remains positive, with capacity up 5.5% compared with last year. To date, 77% of that capacity has been sold, bookings are ahead by 4% and the load factors are down 1.4%. Due to the strengthening of the loonie, offset by rising fuel costs, operating expenses are currently down 3.3%.

Looking ahead to summer, the transatlantic market (Transat’s main market during this season), capacity is up 17% compared with 2017. To date, 30% of seats have been sold, load factors are similar and selling prices are up 1.7% compared with the same date last year. Higher fuel costs, net of fluctuations in the Canadian dollar against the greenback, the euro and the pound have currently led to a 3.3% increase in operating costs.

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