Transat’s Q4 results underline dire situation facing Canada’s airlines 
Credit: Catherine Pleau/Transat

Transat’s Q4 underlines dire situation facing Canada’s airlines 

MONTREAL — Any expansion of COVID-19 testing programs like the one at Calgary Airport can’t come a moment too soon for Canada’s airlines and the travel industry, as Transat’s Q4 results show all too clearly.

Canada’s airlines have been hammered by the pandemic and the travel restrictions, now into their 10th month.

The COVID-19 testing pilot project at YYC, announced in October in partnership with the federal government, saw both an uptick in bookings out of Calgary for airlines including WestJet, and low levels of COVID-19 positives, according to the latest stats.

Earlier this month Ontario Premier Doug Ford said the Ontario government is working to reduce the quarantine time for travellers arriving at Canada’s busiest airport, and the industry is waiting to see if that means a COVID-19 testing pilot project similar to YYC’s. ‘We’re working with the federal government right now at Toronto Pearson to reduce the downtime,” Ford said at his daily briefing on Dec. 2. “Once you come back you have to quarantine for 14 days. We want to knock that down, similar to what they’re doing out in Alberta. They’re doing a trial, we’re doing a trial.”

At the same time the Ontario government has announced that individuals requesting a COVID-19 test for outbound international travel clearance are no longer eligible for a publicly funded COVID-19 test in Ontario.

The Ontario government said the move was made in consultation with the Chief Medical Officer of Health and other health experts. The announcement, posted today, can be found here.

In the meantime airlines are losing millions of dollars daily with no end in sight to the travel restrictions. Last week Prime Minister Justin Trudeau announced an extension to the closure of the Canada – U.S. border, to Jan. 21, 2021, in line with the extension of the mandatory 14-day quarantine measures and other restrictions, also to Jan. 21, 2021.

Canada’s airlines, and the travel industry, are also waiting to hear more details about the federal government’s proposed financial assistance package, announced Nov. 8 with no further information coming since that date. Transport Minister Marc Garneau made it clear that a bailout would be contingent on refunds, which could trigger up to $200 million in commission recalls for the already battered retail travel sector.


Transat announced its fourth quarter 2020 results last Friday, posting $28.4 million in Q4 revenues, a decrease of $664.8 million (95.9%) compared with 2019.

Operations generated an operating loss of $239.3 million compared with operating income of $37.1 million in 2019, a deterioration of $276.4 million.

“Our results reflect COVID-19’s devastating impact across the travel industry,” said Jean-Marc Eustache, Transat’s President and CEO.

Eustache notes that throughout 2020 “we took all necessary actions to limit the damage and preserve our cash. The upcoming completion of the transaction with Air Canada should give us the solidity to face the crisis and capitalize on the recovery that should be sparked by the arrival of a vaccine. We have put in place a $250 million short-term financing facility and are currently working on replacing it, should the transaction not take place, with an overall financing covering our needs for the year 2021. This financing could also be obtained as part of a support program for the industry, as announced by the government.”

As at Oct. 31, 2020, Transat’s financial position included cash and cash equivalents totalling $426.4 million, compared with $564.8 million as at Oct. 31, 2019.

Customer deposits at Oct. 31, 2020 including future travel credits given to out-of-pocket passengers in the wake of the pandemic and flight cancellations, amount to $531.7 million, 43% of which was placed in trust.

Air Canada’s proposed acquisition of Transat, originally for $720 pre-pandemic, is now priced at $190 million, as announced in October 2020.


Meanwhile the numbers coming out of the COVID-19 testing pilot project at Calgary Airport are reason for optimism, especially if the program gets rolled out to other airports, as many are hoping.

The number of positive COVID-19 tests in a pilot project for international travellers at the Calgary airport and the Coutts border crossing in southern Alberta has been reasonably low after its first six weeks, according to reports from the Canadian Press.

The voluntary program offers Canadians the option of getting a test when they arrive at YYC. They must then self-isolate for 24 to 48 hours while they wait for the results. If the results are negative, they can leave quarantine, but must monitor for symptoms daily and get a second swab within six to seven days of their arrival date.

As of Dec. 10, the province said 14,382 travellers had taken tests. About 1.4 per cent were positive with the initial swab. After the second test, the infection rate was 0.7 per cent.

“The border pilot is off to a successful start,” said Alberta Health spokesman Tom McMillan.

The project is scheduled to last six months, or until 52,000 passengers have gone through the process. There are also plans to expand it next year, to Edmonton International Airport.

“This project is the first of its kind in Canada. We continue to work to refine processes in co-operation with our partners, and all participating travellers are being closely monitored,” McMillan said.


Agents have faced the most difficult time the industry has ever seen, by far, over the past 10 months.

For those looking to get a break, Transat today announced an exclusive 20% discount to travel agents on its flights and packages to the South.

Transat says agents who take advantage of the special discount will be able to familiarize themselves with Transat’s Traveller Care health and safety program, implemented in the wake of the pandemic and designed to give clients looking to travel complete peace of mind.

The agent discount promotion is valid for bookings made from Dec. 9, 2020, to Jan. 31, 2021, for travel before April 30, 2021. Some exceptions apply.

For more details on how to make a reservation, agents are invited to Get Connected.

With file from The Canadian Press

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