Transat A.T. Reports First Quarter Adjusted Net Loss of $109 Million or $2.89 Per Share
Air Transat has reported a first quarter 2021 net loss of $109 million or ($2.85) per share on a quarterly revenue decline of 92 percent to $42 million. As of January 31, 2021, the carrier had cash and cash equivalents totaling $303 million.
On Thursday (March 11, 2021), Transat A.T., Inc. reported their first quarter fiscal 2021 financial results. The company reported an adjusted net loss of $109 million or ($2.89) per shar on a 92 percent revenue decline to $42 million compared to Q1 2020. As of January 31, 2021, Transat held $302.8 million in cash and cash equivalents and has extended a $250 million credit facility until June 30, 2021. The company is actively seeking long-term financing of at least $500 million to secure their liquidity position in the absence of acquisition by Air Canada. Company shareholders and the Canadian Government have approved the transaction and a decision by the European Commission id expected in H1 2021.
In Thursday’s announcement, Transat’s Chief Executive Officer, Jean-Marc Eustache, said,
“These results are for a quarter where it was once again impossible to operate our business in a sustainable manner. With the arrival of vaccines, we're now preparing ourselves for a resumption of operations in the summer and particularly next winter. Our priority for the current quarter, while continuing to work on obtaining EU approval, is to secure financing, finalize our recovery plan and review all our options in the event the transaction with Air Canada will not take place.”
Air Transat returned two Airbus A330s and one Boeing 737-800 to the lessors early during the first quarter. The company continues to negotiate with suppliers and lessors for cost reductions and changes in payment terms. Transat also continues to make use of the Canada Emergency Wage Subsidy (CEWS) program to finance part of working and laid off employee wages.
The company’s working capital ration at the end of the first quarter was 0.77, compared to 1.04 at January 31, 2020, attributable to a decrease in profitability, partially offset by a $50 million revolving credit drawdown. As of January 31, 2021, Transat held customer deposits for future travel totaling $573.6 million (including $519.1 million in travel credits), compared to $809.1 million at the end of fiscal Q1 2020. The company reported off-balance-sheet agreements (excluding contracts with service providers) $752.8 million at the end of the quarter, largely attributable to ten ordered and undelivered Airbus A321neos.
Based in Montreal, Transat A.T. Inc. (TSX: TRZ) has 5,000 employees and 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