Big improvement in Q1 for Transat A.T.
March 14, 2013, Montreal - Transat A.T. Inc. has reported a big improvement in first-quarter results compared with a year ago, but remains mired in red ink as the integrated vacation tour operator also saw revenue decline on reduced capacity.
March 14, 2013 By The Canadian Press
The Montreal-based operator of Air Transat says its net loss for the three months ended Jan. 31 was $15.1 million or 39 cents per share on a diluted basis.
That almost halved its net loss of $29.5 million or 77 cents per share in the same fiscal 2012 period.
Revenue slid to $805.7 million from $829.3 million, down $23.6 million or 2.8 per cent.
Meanwhile, the company reported an adjusted after-tax loss of $21.6 million or 56 cents per share in the quarter, compared with $29.9 million or 79 cents in 2012.
"Changes brought to our organization over the last 18 months, as well as our decision to slightly reduce capacity, have contributed to the improvement of our results,'' president and CEO Jean-Marc Eustache said in a release.
The company has been working hard to improve efficiencies, among other things striking deals with its employees to reduced costs.
For example, Air Transat's more than 1,700 flight attendants recently agreed to some $9-million, non-wage concessions to help it meet increasing competition in the holiday travel industry.
A key element will see the number of attendants on A330 airliners reduced to 10 from 11. The concessions by the flight attendants, pilots and others are part of moved by Transat to trim $20 million in annual operating costs.
The company says it needs to realize the savings in order to develop a fleet of narrow-body Boeing 737s, which the union says should allow the company to retain more jobs in the long run. The 737s would replace airliners flown under subcontract by Nova Scotia-based Canjet since 2009. The Canjet contract ends in April
Transat A.T. is an integrated international tour operator that offers package holidays to more than 60 destinations in some 50 countries, but operates mainly in Canada and Europe as well as the Caribbean, Mexico and the Mediterranean Basin.
The company said revenues of North American business units, which are generated by sales in Canada and abroad, decreased by $10.1 million or 1.4 per cent in the quarter compared with the same period in 2012.
Capacity to sun destinations was down 12 per cent compared with 2012 while that on the transatlantic market was down 18 per cent the company said.
North American business units recorded an operating loss before amortization and depreciation of $8.3 million, compared with $19.1 million in 2012. The improvement in margin was mainly attributable to higher selling prices during the quarter.
Revenues of European business units, which are generated by sales made in Europe and in Canada, decreased by $13.5 million or 10.5 per cent, mainly due to a decision to reduce capacity. European operations generated an operating loss before amortization and depreciation of $12.7 million, similar to the previous year.