Transat A.T. Inc., parent of the Air Transat brand, has reported an increase in revenue by by $495.8 million for the quarter ended July 31, 2022, compared with 2021 (a quarter with virtually no operations). Compared with 2019, quarterly revenues were down $190.6 million or 27%. Capacity offered was 82% of that deployed in 2019 across all programs and 68% for Europe, the main program during this period. Overall, the number of travellers was down 24% for the third quarter compared with 2019.
"The recovery emerging at the end of the last quarter has been confirmed in recent months. With our prudent planning and our teams' exceptionally high quality execution, we were able to deploy virtually all of our programs, with continuously improving load factors," stated Annick Guérard, President and Chief Executive Officer of Transat.
Operations resulted in an operating loss of $93.2 million, an improvement of $5.2 million compared with the $98.4 million loss in 2021. The improvement was reined in by a 112% surge in fuel prices (or $103.3 million) during the quarter, compared with 2021. Transat reported an adjusted operating loss of $57.8 million, a deterioration of $6.9 million, compared with $50.9 million in 2021.
Net loss attributable to shareholders amounted to $106.5 million (or $2.82 per diluted share) compared with $138.1 million (or $3.66 per diluted share) for the corresponding quarter of last year. The net loss attributable to shareholders in 2022 was reduced by a $14.5 million gain on the revaluation of the liability related to warrants, partially offset by the $6.9 million loss related to the change in the fair value of fuel-related derivatives and other derivatives. Excluding non-operating items, Transat reported an adjusted net loss of $120.9 million ($3.20 per diluted share) for the third quarter of 2022, compared with $115.6 million ($3.06 per diluted share) in 2021.
"We are on track for a winter season that promises to match pre-pandemic levels. The pace of sales is currently very comparable to 2019. Although the quarterly results are still affected by the costs of resuming operations, July was our first profitable month in more than two years, setting the stage for improved results. The strong pricing this quarter also partially absorbed the increase in fuel costs, the adverse effect of which is likely to persist for some time."
"Our current cash position, combined with new financing obtained during the quarter, gives us the required flexibility for the future. We also continued to implement our strategic plan during the quarter, particularly with respect to the fleet, with the receipt of two new A321LRs and the order of four A321XLRs. These new aircraft will bring us all the advantages of the LR, including cost and environmental benefits, with an even longer range", concluded Ms. Guérard.
As at July 31, 2022, Air Transat has cash and cash equivalents amounting to $411.3 million, compared with $429.4 million as at the same date in 2021. In total, the available financing amounted to a maximum of $963.3 million, of which $863.2 million was drawn down, for unrestricted liquidity of $511.3 million.
The airline took delivery of two A321LRs during the quarter and is expecting five more aircraft of this type in 2023 and 2024. In recent days, Transat also finalised its first order since 2018, for four A321XLRs, including three firm orders for delivery in 2025-2026 and an option for 2027.
The company reported that the current situation for the fourth quarter of the year “is showing very encouraging signs in terms of bookings as the last-minute booking trend persists”.
Across all markets, the planned capacity for summer 2022 represents 92% of the 2019 capacity. For the transatlantic program, the airline’s main market for the summer season, the planned capacity in 2022 is 81% of the 2019 level. In the sun destinations program, the planned capacity is slightly higher than in 2019. Lastly, the airline tripled its capacity in the transborder market and deployed a slightly higher capacity for its domestic program, compared with 2019.
The company noted that if fuel prices remain at current levels, it would create “strong pressure on the Corporation's operating costs and profitability”, and hence it is difficult to “forecast the evolution of the health and economic situations or their impact on bookings and future financial results with sufficient precision for the Corporation to present a more comprehensive outlook for the fourth quarter of 2022”.