MONTREAL — Transat reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
Transat lost $39.9 million for the quarter ended July 31. The result compared with a profit of $57.3 million.
Revenue for Q3 totalled $736.2 million, down from $746.3 million in the same quarter last year.
“Transat’s third-quarter results reflect evolving market conditions and industry-wide pressure as recently indicated by other carriers. Demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty. Capacity increases throughout the industry also added to competitive pressure and negatively impacted yields,” said Annick Guérard, President and Chief Executive Officer of Transat.
Guérard added: ”We have launched a comprehensive plan, referred to as our Elevation Program, which is designed to accelerate our corporate strategy execution and drive long-term profitable growth.”
The program, initiated this summer, aims for a complete review of Transat’s operations and business practices. Its objective is to accelerate the implementation of enhanced tools and processes in order to optimize overall execution and efficiency.
The program will be spearheaded by the newly created Elevation Management Office, which will strengthen governance and accountability for the initiatives undertaken.
“Our target is to achieve a $100 million improvement in annual adjusted EBITDA over the next 18 months,” said Guérard.
Transat’s profitability remains affected by costs related to capacity deployment and by the Pratt & Whitney GTF2 engine issue.
Transat has agreed to a financial compensation from Pratt & Whitney relating to operational disruptions during the 2023-2024 period. Such financial compensation, which is mostly in the form of credits, will be applied to the purchase of additional spare engines, which Transat intends to monetize through a sale and leaseback transaction.
With file from The Canadian Press
