MONTREAL — Transat A.T. said it was very satisfied with third quarter results despite a drop in net income to $25.8 million from $41.1 million the previous year in large part to the impact of fuel-hedging accounting during 2013.
The company posted revenues of $941.7 million for the quarter ended July 31, 2014, compared with $927.0 million in 2013, an increase of $14.7 million, or 1.6%.
“In spite of the increase of more than 10% in the overall capacity on the transatlantic market, these are among the best third-quarter results we’ve ever posted,” said Jean-Marc Eustache, Transat’s President and Chief Executive Officer.
“In the entire history of the company, we’ve done better on only two occasions, including last year, which was a record. So we’re talking about a very satisfying start to the season.”
Revenues of North American business units, which are generated by sales in Canada and abroad, decreased by $27.9 million (4.0%) compared with the same period in 2013. The decline in revenues stemmed from a decrease of 2.8% in the number of travellers, which was partially offset by the higher average selling prices. During the quarter, the corporation reduced capacity on the transatlantic market by 2.1% and increased supply on its Sun destination routes by 8%.
North American business units recorded operating income of $19.8 million, compared with $28.1 million in 2013. The decline in value of the Canadian dollar versus the U.S. dollar, the euro and the pound led to an increase in operating expenses, offset in part by the corporation’s efforts to increase efficiency, but the decrease in operating income is attributable above all to the impact of a substantial increase in capacity on the transatlantic market.