Air Transat reported C$736.2 million in revenues for the third quarter 2024, down 1.4% from last year's third quarter. Operating profits were C$41.3 million, down from $114.8 million last year. It recorded a net loss of C$39.3 million, or a C$1.03 loss per share, swinging from last year's net income of C$57.3 million, or C$1.49 per share.
"Transat's third-quarter results reflect evolving market conditions and industry-wide pressure as recently indicated by other carriers," said Transat president and CEO Annick Guerard. "Demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty."
The drop in revenues were driven by "intensified competition" with overcapacity across the industry, along with impact from the GTF engine issues. The company said it has agreed to financial compensation from Pratt & Whitney, relating to disruptions during the 2023-2024 period. Guerard said the compensation was "mostly in the form of credits" and will be used to purchase additional spare engines.
"We intend to monetise [the engines] through a sale and leaseback transaction," added Guerard.
The company reported a negative free cash flow of C$168.7 million during the quarter, compared to a negative C$52.1 million last year.
"We have launched a comprehensive plan, referred to as our elevation program, which is designed to accelerate our corporate strategy execution and drive long-term profitable growth," explained Guerard. "The program, initiated this summer, aims for a complete review of operations and business practices. Its objective is to accelerate the implementation of enhanced tools and processes for our teams, in order to optimise overall execution and efficiency."
As of July 31, 2024, its total net debt at the end of the quarter was C$1.9bn.