Transat narrows loss on strong travel demand, higher prices

Stronger demand for travel and higher ticket prices helped Air Transat’s parent company narrow its loss in the second quarter.

Transat AT Inc. TRZ-T lost $29-million, or 76 cents a share, in the three months ending on April 30, compared with a loss of $98-million ($2.60) in the same period of 2022, the Montreal-based airline and tour operator said on Thursday morning.

Revenue more than doubled to $870-million, and the amount of cash or its equivalent rose to $624-million from $511-million, compared with a year ago, Transat said.

Customer deposits for future travel reached $867-million, an increase of 38 per cent from pre-pandemic levels on April 30, 2019. Transat said this reflects “the rebound in demand and higher average selling prices.”

Compared with the same period in 2019, ticket prices rose by 15 per cent in the beginning of the quarter and by 24 per cent at the end. For the summer, Transat said it is offering 89 per cent of 2019′s seat capacity, and more than 60 per cent of this is sold.

“The combination of strong demand and upward pricing will allow the corporation to cope with a cost environment that remains generally higher and volatile,” said Transat, which raised its financial targets for the year.

The International Air Transport Association said global airline traffic in April was at 90.5 per cent of pre-pandemic levels, and planes are 81-per-cent full, on average.

“April continued the strong traffic trend we saw in the 2023 first quarter. The easing of inflation and rising consumer confidence in most OECD countries combined with declining jet fuel prices, suggests sustained strong air travel demand and moderating cost pressures,” said Willie Walsh, IATA’s director general.

Transat’s share price has risen by 50 per cent on the Toronto Stock exchange this year, to $4.40.