Transat AT reports $39.9M Q3 loss compared with $57.3M profit a year earlier

An Air Transat Airbus A330 is silhouetted against the full moon when approaching for landing in Lisbon just before sunrise, Monday, July 22, 2024. Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower. (Armando Franca, The Canadian Press)

Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.

The parent company of Air Transat said Thursday it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.

The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.

Revenue in what was the company's third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.

On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.

Transat chief executive Annick Guerard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.

The airline has launched a plan to head faster toward profitable growth.

Guerard said the target is to reach a $100 million improvement in annual adjusted EBITDA over the next 18 months.

Profitability continues to be hit by the Pratt and Whitney engine issue, which has so far grounded at least six Transat aircraft, Guerard said on a call to analysts.

The company said it 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 we intend to monetize through a sale and leaseback transaction," Guerard said in a statement.

This report by The Canadian Press was first published Sept. 12, 2024.

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