MONTREAL — Transat is gearing up for a gradual resumption of operations on July 30.
The restart date is in line with Transat’s update last month that it was suspending operations through July 29.
In a list of notables from its Q2 2021 results (see below), the company said it will continue to refocus its airline operations with a greater presence in Eastern Canada and Montréal, and also that it has discontinued its hotels division.
“Following a quarter without revenues, progress made on vaccinations allows us to plan for a gradual resumption starting July 30,” says Annick Guérard, President and CEO, Transat.
“We hope that a safe travel recovery plan can be deployed as soon as possible and will lead to a lifting of restrictions in the near future. All indications are that our customers are eager to make use of some of their savings from recent months to travel. We’re excited about welcoming them back soon,” she added.
Guérard took over the top spot at Transat on May 27, following the retirement of Jean-Marc Eustache.
“The financing we secured will allow us to roll out our plan over the coming years. Our strong brand, our employees’ commitment and the transformation we have undertaken and which will continue over the coming years will allow us to position ourselves again as our customers’ favourite leisure travel company and become more profitable than before the pandemic,” says Guérard.
Transat’s Q2 results, also announced today, included a net loss of $69.6 million. Last year’s Q2 loss, when a strong start was soon overshadowed by the early weeks of the pandemic, was $179.5 million. Revenue was $7.6 million, down from $571.3 million year over year.
As Transat notes in its Q2 briefing, all four of Canada’s major airlines agreed to a request from the federal government in January 2021 to temporarily suspend all winter sun flights until April 30. Since that time sun flights and flights to most other destinations have been largely grounded in the wake of the second and third waves of COVID.
Transat says it has implemented a series of operational, commercial and financial measures, including new financing and cost reduction measures, aimed at preserving its cash. On April 29 the company announced its agreement with the Government of Canada that allows it to borrow up to $700 million in additional liquidity through the Large Employer Emergency Financing Facility (LEEFF). Also in April, Transat and Air Canada announced they were walking away from their acquisition deal after months of delays in the wait to get a green light from the European Commission.
“While the availability of a vaccine makes it possible to hope for the resumption of operations at a certain level during 2021, the Corporation does not expect such level to reach the pre-pandemic level before 2023,” says the company.
Other notables from the Q2 briefing …
- As at April 30, 2021, cash and cash equivalents totalled $346.1 million.
- Deposits from customers for future travel amounted to $560.4 million in Q2 2021, compared with $605.1 million as at April 30, 2020, a decrease of $44.7 million.
- Following Transat’s April 29 announcement that it would offer COVID refunds, the company has received requests for about 64% of the amount of credits issued and made refunds for more than 70% of amounts claimed, at the end of May 2021. Customers have until Aug. 26, 2021 to submit their refund requests.
- Transat’s strategic plan includes:
- During 2021, stabilize the business by streamlining operations and laying the foundations for a recovery that will ensure the Corporation’s long-term viability after the pandemic;
- During the 2022-2026 period, make the Corporation profitable again and complete its transformation to achieve a level of profitability that exceeds pre-pandemic levels, as well as grow in new markets;
- After 2026: leverage those achievements to propel Transat toward a new growth phase.
- To achieve those goals, Transat says it will refocus airline operations and redefine the network by ensuring a greater presence in Eastern Canada and Montréal and forging alliances to strengthen the network; among other financial and fleet strategies
- Discontinuation of the hotel division: On May 20, 2021, due to the decline in liquidity as a result of the COVID-19 pandemic, and in line with the objectives of the new strategic plan, Transat’s board of directors approved the discontinuation of the hotel division’s operations.