Air Transat Reports Third Quarter Adjusted Net Loss of $139.8 Million on Revenue of $9.5 Million
Air Transat reported on Thursday a third quarter adjusted net loss of $139.8 million on revenues of $9.5 million. The carrier’s operating loss was $132 million, while their adjusted operating loss totaled $79.9 million.
On Thursday (September 10, 2020), Transat A.T. Inc. (Air Transat) reported their third quarter financial results with an adjusted net loss of $139.8 million. During the quarter, Transat only operated flights and tour operations for one week, from July 23, 2020, and generated revenues of $9.5 million. The carrier’s operating loss totaled $132 million compared to an operating income of $1.7 million during the same period last year, while their adjusted operating loss was $79.9 million. Transat is currently operating 23 international routes and a summer domestic program with most operations taking place in the fourth quarter. As of July 31, 2020, the company had a total of $576.4 million in cash and equivalents. In Thursday’s report, Transat’s President and Chief Executive Officer, Jean-Marc Eustache, said,
“The reduction of operations to just one week for this quarter is unprecedented for Transat and for the industry as a whole. Given the dynamic measures we took to protect the Corporation and its cash flow, we're ready for the recovery. However, with Canada maintaining some of the most stringent border restrictions and still requiring quarantine for people returning from abroad, it's time for the government to provide targeted support for the airline sector to ensure the existence of a competitive industry in Canada over the long term.”
Transat has taken numerous measures since the onset of the global COVID-19 pandemic to preserve liquidity and ensure business continuity. In March, the company drew down a $50 million revolving credit facility and retired their fleet of Airbus A310s. From April 1st through July 22, 2020, the company suspended all flights due to travel restrictions. During the third quarter, senior executives and board members also agreed to increase voluntary pay cuts from 10% to 20% and the company further preserved liquidity by granting customers transferable travel credits with no expiration date for all cancelled flights.
Since March, Transat has also been renegotiating with suppliers and aircraft and property lessors in order to change payment terms and/or defer monthly payments. The carrier also furloughed 85% of their workforce in March and has since recalled around 1,000 employees or about a third of their workforce. In April, the company commenced participation in the Canada Emergency Wage Subsidy (CEWS) program which enabled the partial subsidization of employee wages. Moving forward, Transat anticipates that they will ultimately be forced to lay off at least 2,000 employees or 40% of their workforce.
The approval process for the company’s acquisition by Air Canada remains underway and is awaiting approval by both the Canadian authorities and the European Commission. If all regulatory approvals are obtained and conditions are met, Air Transat expects the deal to close during the fourth quarter of the 2020 calendar year.
Based in Montreal, Transat A.T. Inc. (Air Transat) is the third largest airline in Canada and leading integrated tourism company specializing in holiday travel. The company offers vacation packages, hotel accommodations and air service to more than 60 destinations over 25 countries in the Americas and Europe. Air Transat has been named ‘World’s Best Leisure Airline’ at the Skytrax World Airline Awards.
Source: Air Transat