MAX 8 leased from SmartLynx Malta on December 23, 2023.
Copyright Photo: Air Transat (SmartLynx Malta) Boeing 737-8 MAX 8 9H-LYR (msn 43302) YYZ (TMK Photography). Image: 962436.
For the second quarter:
Financial position:
Transat A.T. Inc., (Air Transat) a holiday travel reference worldwide, particularly as an air carrier under the Air Transat brand, announces its results for the second quarter ended April 30, 2023.
“For the second quarter of 2023, Transat reported a solid performance, with an adjusted operating income of $56.1 million, nearly 40% higher than in the same quarter of 2019. At mid-year, and based on current booking trends, we are raising the target for the adjusted operating income margin from the initially set range of 4% to 6% to a target of 5.5% to 7% for the fiscal year.”+
“Several factors contributed to the Corporation’s favourable results. Firstly, the demand for leisure travel, which is Transat’s primary niche, is holding steady. This high volume of activity is driving prices up, resulting in 15% increases at the beginning of the quarter, and almost 24% at the end of the quarter, compared with the same period in 2019. In addition, Transat actively continued its fleet optimization plan, deploying in winter 2023 a capacity comparable to winter 2019 with 20 fewer aircraft in service. Better price management, thanks to improved practices and new tools, has also helped to maximize revenues and seize market opportunities. Transat also relied on continuous improvement in its operational efficiency throughout the quarter.”
“With more than 60% of our capacity sold, the stage is set for a dynamic summer. Transat will deploy for the summer a capacity representing 89% of its 2019 level, with Europe comprising 80% of the activity, leveraging the most profitable routes for Transat,” stated Annick Guérard, President and Chief Executive Officer of Transat.
Second-quarter highlights
Financial position
As at April 30, 2023, cash and cash equivalents amounted to $623.6 million, an increase of $112.4 million compared with $511.2 million at the same date in 2022. Cash and cash equivalents in trust or otherwise reserved resulting from travel package sales also increased; the balance stood at $262.2 million as at April 30, 2023, compared with $191.9 million at the same date in 2022.
Customer deposits for future travel stood at $867.1 million, up 38% from pre-pandemic levels as at April 30, 2019, reflecting the rebound in demand and higher average selling prices.
During the second quarter, Transat renegotiated secured loans totalling $198.0 million, extending the maturity dates from April 2024 to April 2025. “These amendments provide us greater flexibility in repaying debt and attest to our financial partners’ trust in our recovery plan,” stated Patrick Bui, Chief Financial Officer of Transat.
In total, available financing amounted to a maximum of $963.3 million, of which $863.2 million was drawn down ($858.6 million as at April 30, 2022), for unrestricted liquidity1 of $723.6 million.
Outlook
To date, although load factors for this summer are 2.6 percentage points lower than in 2019, airline unit revenues, expressed in yield, are 29% higher than four years ago. The combination of strong demand and upward pricing will allow the Corporation to cope with a cost environment that remains generally higher and volatile.
In light of the mid-year indicators, the Corporation is raising the target for adjusted operating income1 margin from the initially set range of 4% to 6% to a target of 5.5% to 7% for fiscal 2023. In making these forward-looking statements, the Corporation adjusted its assumptions for the full year, including moderate growth in Canada’s GDP, an exchange rate of C$1.35 to US$1 and an average price per gallon of jet fuel of C$4.25.
Additional Information
The results were affected by non-operating items, as summarized in the following table:
| Highlights and non-IFRS financial measures | ||||
| (In thousands of Canadian dollars) | Second quarter | First six-month period | ||
| 2023 | 2022 | 2023 | 2022 | |
| Revenues | 870,111 | 358,157 | 1,537,568 | 560,595 |
| Operating income (loss) | 18,740 | (87,513) | (19,363) | (161,354) |
| Restructuring costs (reversal) | (557) | — | 2,343 | — |
| Depreciation and amortization | 42,763 | 36,499 | 83,871 | 73,971 |
| Premiums related to derivatives that matured during the period | (4,802) | — | (7,376) | — |
| Adjusted operating income (loss)1 | 56,144 | (51,014) | 59,475 | (87,383) |
| Net loss | (29,180) | (98,276) | (85,790) | (212,621) |
| Restructuring costs (reversal) | (557) | — | 2,343 | — |
| Change in fair value of derivatives | 13,949 | 1,192 | 23,870 | 1,720 |
| Revaluation of liability related to warrants | (3,234) | 353 | 6,905 | 809 |
| Gain on long-term debt modification | — | (22,191) | — | (22,191) |
| Gain on asset disposals | — | (66) | (2,511) | (4,018) |
| Foreign exchange (gain) loss | 15,867 | 7,425 | (6,962) | 29,421 |
| Premiums related to derivatives that matured during the period | (4,802) | — | (7,376) | — |
| Adjusted net loss1 | (7,957) | (111,563) | (69,521) | (206,880) |
| Diluted loss per share | (0.76) | (2.60) | (2.25) | (5.63) |
| Restructuring costs (reversal) | (0.01) | — | 0.06 | — |
| Change in fair value of derivatives | 0.36 | 0.03 | 0.63 | 0.05 |
| Revaluation of liability related to warrants | (0.08) | 0.01 | 0.18 | 0.02 |
| Gain on long-term debt modification | — | (0.59) | — | (0.59) |
| Gain on asset disposals | — | — | (0.07) | (0.11) |
| Foreign exchange (gain) loss | 0.41 | 0.20 | (0.18) | 0.78 |
| Premiums related to derivatives that matured during the period | (0.13) | — | (0.19) | — |
| Adjusted net loss per share1 | (0.21) | (2.95) | (1.82) | (5.48) |
| As at April 30, 2023 | As at October 31, 2022 | |||
| Cash and cash equivalents | 623,562 | 322,535 | ||
| Undrawn funds from credit facilities | 100,000 | 100,000 | ||
| Unrestricted liquidity1 | 723,562 | 422,535 |
Air Transat has unveiled the details of its 2023-2024 winter flight program for Quebec travellers, slated to begin on November 1, 2023. The airline continues to develop its operations, and will offer, at the peak of the season, more than 180 direct flights per week from Montreal and Quebec City to over 30 destinations in the Caribbean, Mexico, Central and South America, the United States and Europe.
At the peak of the season, Air Transat’s overall program will include over 300 direct flights per week departing from eight Canadian cities. In addition to Montreal and Quebec City, it will also offer flights from Toronto, Ottawa, London, Hamilton, Halifax and Moncton.
Sun destinations: more accessible than ever
Compared to last year, over 30 additional flights will be scheduled from Montreal and Quebec City, reinforcing the airline’s commitment to meet travellers’ needs while offering even greater travel day flexibility.
In particular, the company is strengthening its position as the primary Canadian airline serving the Dominican Republic. At the peak of the season, two additional direct flights will be offered each week between Montreal and Punta Cana, while one additional direct flight will be offered between Quebec City and Punta Cana and between Quebec City and Puerto Plata.
Air Transat is also significantly enhancing its Cuba offer with two additional flights departing from Montreal to Cayo Coco, three to Holguín, two to Varadero and one to Santa Clara.
The company continues to develop its Mexican market, with one additional flight departing from Montreal and one from Quebec City to Cancún, as well as two additional flights from Montreal to Puerto Vallarta.
Air Transat is also setting its sights on high-growth markets such as Colombia, Costa Rica, El Salvador and Saint Martin. Each week, one additional direct flight will be departing from Montreal to Cartagena, Liberia, Philipsburg, San José and San Salvador.
| Destination | From Montreal | From Quebec City |
| ACAPULCO – Mexico | 1 | |
| CANCÚN – Mexico | 14 | 5 |
| CARTAGENA – Colombia | 3 | |
| CAYO COCO – Cuba | 5 | 2 |
| FORT-DE-FRANCE – Martinique | 3 | |
| LIBERIA – Costa Rica | 4 | |
| HAVANA – Cuba | 2 | |
| HOLGUÍN – Cuba | 6 | 1 |
| MONTEGO BAY – Jamaica | 4 | |
| PHILIPSBURG – St. Maarten | 3 | |
| POINTE-À-PITRE – Guadeloupe | 3 | |
| PORT-AU-PRINCE – Haiti | 1 | |
| PUERTO PLATA – Dominican Republic | 6 | 2 |
| PUERTO VALLARTA – Mexico | 7 | 2 |
| PUNTA CANA – Dominican Republic | 14 | 6 |
| RIO HATO – Panama | 2 | |
| SAMANA – Dominican Republic | 5 | 1 |
| SAN JOSÉ – Costa Rica | 4 | |
| SAN JUAN – Puerto Rico | 1 | |
| SAN SALVADOR – El Salvador | 2 | |
| SANTA CLARA – Cuba | 3 | 2 |
| VARADERO – Cuba | 6 | 2 |
Number of weekly flights at the peak of the season
Direct flights to Europe year-round
Departing from Montreal, Air Transat will be offering direct flights to seven European destinations. In accordance with the strategy announced earlier this year, the airline is reducing the seasonal nature of its operations in Europe by offering year-round service to Marseille and Lyon and by extending its flights to Nantes until mid-January.
Departing from Quebec City, the number of flights to Paris will rise to two per week.
| Destination | From Montreal | From Quebec City |
| LISBON – Portugal | 2 | |
| LONDON – UK | 3 | |
| LYON – France | 3 | |
| MALAGA – Spain | 3 | |
| MARSEILLE – France | 2 | |
| NANTES – France (until January 13, 2024) | 2 | |
| PARIS – France | 7 | 2 |
Number of weekly flights at the peak of the season
Air Transat has also unveiled the details of its 2023-2024 winter flight program for Ontario travellers, slated to begin on November 1, 2023. The airline continues to develop its operations and will offer, at the peak of the season, more than 110 direct flights per week from Toronto, Ottawa, London and Hamilton to over 20 destinations in the Caribbean, Mexico, Central and South America and Europe.
At the peak of the season, Air Transat’s overall program will include over 300 direct flights per week departing from eight Canadian cities. In addition to Toronto, Ottawa, Hamilton and London, it will also offer flights from Montreal, Quebec City, Moncton and Halifax.
Sun destinations: more accessible than ever
Compared to last year, over 20 additional flights will be scheduled departing from Ontario, reinforcing the airline’s commitment to meet travellers’ needs while offering even greater travel day flexibility.
In particular, the company is strengthening its position as the primary Canadian airline serving the Dominican Republic. At the peak of the season, four additional direct flights will be offered each week between Toronto and Punta Cana, while one additional direct flight will be offered between Toronto and Puerto Plata, as well as Toronto and Samana. One additional direct flight will connect Ottawa and London with Punta Cana.
Air Transat is also significantly enhancing its Cuba offer with two additional flights departing from Toronto to Cayo Coco and one additional flight to Holguín, Varadero and Santa Clara.
The company continues to develop its Mexican market, with four additional flights departing from Toronto to Cancún and two to Puerto Vallarta. One additional flight will depart from Ottawa and London to Cancún.
| Destination | From Toronto | From Ottawa | From London | From Hamilton |
| CANCÚN – Mexico | 14 | 3 | 2 | 1 |
| CARTAGENA – Colombia | 1 | |||
| CAYO COCO – Cuba | 5 | 1 | 1 | |
| LIBERIA – Costa Rica | 4 | |||
| LA ROMANA – Dominican Republic | 1 | |||
| HOLGUÍN – Cuba | 5 | |||
| MONTEGO BAY – Jamaica | 7 | |||
| PHILIPSBURG – St. Maarten | 1 | |||
| PUERTO PLATA – Dominican Republic | 5 | 1 | 1 | |
| PUERTO VALLARTA – Mexico | 4 | |||
| PUNTA CANA – Dominican Republic | 14 | 3 | 2 | 1 |
| RIO HATO – Panama | 2 | |||
| SAMANA – Dominican Republic | 3 | |||
| SAN JOSE – Costa Rica | 3 | |||
| SAN JUAN – Puerto Rico | 1 | |||
| SANTA CLARA – Cuba | 3 | 1 | ||
| VARADERO – Cuba | 5 | 1 |
Number of weekly flights at the peak of the season
Direct flights to Europe year-round
Departing from Toronto, Air Transat will be serving six European destinations, for a total of 20 direct flights to Europeeach week. The airline is boosting the frequency of its weekly service to Faro to two direct flights.
| Destination | FromToronto |
| FARO – Portugal | 2 |
| GLASGOW – UK | 1 |
| LISBON – Portugal | 2 |
| LONDON – UK | 7 |
| MANCHESTER – UK | 2 |
| PORTO – Portugal | 2 |
Number of weekly flights at the peak of the season
Top Copyright Photo: Air Transat Airbus A330-243 C-GUBT (msn 732) LGW (Richard Vandervord). Image: 960465.
Air Transat aircraft photo gallery:
Air Transit has announced that, for the second time this year, it is expanding its operations in the French market, most notably on two exclusive direct routes departing from Montreal.
Following the annualization of its service to Lyon announced earlier this winter, the airline is also adding Marseille and the region of Provence to its roster of year-round destinations. In addition, the nonstop service to Nantes will also be extended.
Flights that initially ended in the fall will now be operated until January 24, 2024, in order to offer travellers more flexibility when travelling to western France.
Air Transat is the only airline to offer direct flights from Canada to the airports of Marseille and Nantes. A total of seven French cities will be served non-stop this year, including three on a year-round schedule, namely Paris, Lyon, and now Marseille.
The route will mainly be operated with new generation Airbus A321LR aircraft.
Top Copyright Phone: Air Transat Airbus A321-271NX WL C-GOIW (msn 10287) LGW (Robbie Shaw). Image: 956048.
Air Transit aircraft photo gallery:
Air Transat has announced that it will offer a nonstop service between Montreal (Trudeau) and Lyon next winter, thus becoming the only airline to operate this route year-round.
In winter 2023-2024, this route will operate three days a week from Montreal on Tuesdays, Fridays and Saturdays.
Air Transat already flies up to seven times per week between Montreal and Lyon in the summer season. It services a total of eight French cities including two on a year-round schedule, namely Paris and now Lyon.
The route will be operated with new generation Airbus A321LR aircraft featuring spacious cabins, state-of-the-art in-seat entertainment systems and the lowest fuel consumption and greenhouse gas emissions (CO2 and NOx) in their class.
Top Copyright Photo: Air Transat Airbus A321-271NX WL C-GOJC (msn 10521) YYZ (TMK Photography). Image: 956884.
Air Transat aircraft photo gallery:
Air Transat has announced it will close its flight attendants base at Vancouver International Airport.
As a result, more than 200 flight attendant positions will be eliminated.
These flight attendants will have the opportunity to be reassigned to bases in Montreal and Toronto.
Top Copyright Photo: Air Transat Airbus A321-271NX WL C-GOJC (msn 10521) (rainbow star) LGW (Robbie Shaw). Image: 959451.