Weak loonie pushes up costs, Transat posts losses

Weak loonie pushes up costs, Transat posts losses

MONTREAL — Transat AT posted a loss in its latest quarter, which included the Christmas holiday period, despite higher revenue as the weak Canadian dollar hurt its results.

The travel company said the loonie’s weakness against the U.S. dollar resulted in higher overall costs that weren’t completely offset by lower fuel prices or higher average selling prices for its services.

The loss for the first quarter of its financial year was $61.2 million, or $1.64 per share, Transat said. That compared with a loss of $64.3 million or $1.66 per share in the year ago quarter.

The company said the improvement to its bottom line was due to non-operating items such as fuel and currency hedging.

Otherwise, the Montreal-based company’s adjusted loss would have increased to $37.3 million or $1 per share from $32.4 million or 84 cents per share a year ago, despite a seven per cent increase in revenue.

Revenue rose to $846.9 million in the quarter ended Jan. 31, from $788.6 million a year earlier.

“During the first quarter, the net increase in the cost of packaging all-inclusive Sun destinations vacations was $24 million, and was only partly absorbed by consumers,” Transat president and CEO Jean-Marc Eustache said in a statement.

“The dollar, the Zika virus, the possibility of strike action by our pilots, which has now been averted, an economic slowdown and fairly mild weather conditions are all factors that make the current winter season challenging.”