Transat AT, the parent company of Air Transat, experienced a “significant” Omicron-variant-fuelled hit during its fiscal first quarter 2022, as passengers took a step back from planning air travel.
The Montreal-based leisure carrier says on 10 March that it also started discussions with the Canadian government for additional funds to help support it through the volatile post-Covid-19 environment.
“While we were in the midst of a strong recovery, with November and December results matching our targets, the emergence of the Omicron variant brought our sales to a temporary halt between mid-December and early February,” says chief executive Annick Guerard. That halt affected both winter and summer bookings.
Transat lost C$114 million ($89 million) during the quarter, which ended on 31 January, up from a loss of C$60.5 million in the same quarter last year.
The Omicron wave of Covid -19 resulted in “massive booking cancellations”, and forced the airline to cancel 30% of flights in January.
“Subsequently, and particularly after the easing of restrictive measures at the borders, bookings picked up again, for both winter and summer, which augurs well for the coming months,” she adds. “We remain convinced that this Omicron wave was a bump in the road.”
“It is clear that our customers are impatient to travel, and to make up for all the time we have been forced to stay at home by the pandemic,” she says.
Revenue during the fiscal quarter rose almost fivefold, to C$202 million from C$41.9 million last year, but that’s still 68.7% lower than during the same quarter in pre-pandemic 2019/2020, and “far from what it needs to be”, Guerard says.
The airline says that it has asked for additional financial aid from the Canadian government as the vagaries of the crisis drag on. Last April, Transat received C$743 million in government support through the Large Employer Emergency Financing Facility (“LEEFF”), in the form of loans that will come due in the coming years.
“The deferral of certain terms of our financing [LEEFF], as well as the securing of an additional C$43.3 million for refunding travellers, will facilitate our recovery following the resurgence of the pandemic,” Transat says.
“As we will remain in a cash burn situation for the coming months, we are also in discussions with the federal government for additional funding,” adds Guerard.
For the upcoming summer travel season, the airline is planning capacity at 91% of 2019 levels with eight fewer aircraft and 13% higher utilisation. Transatlantic travel will be at 78% of the 2019 levels, sun destinations at 96%, and the carrier will also offer more domestic capacity.
“Moreover, the corporation plans to increase its presence in the transborder market by quadrupling its capacity compared with 2019 by offering, among other things, new flights from Montreal to Los Angeles and San Francisco,” Transat says.
The carrier ended the quarter with 29 aircraft in its fleet, 10 of which are Airbus A321LRs. The airline will take two more of the fuel-efficient type this summer, and five more in the next two years.
With fuel prices rising rapidly as a result of inflation and the ongoing conflict in Eastern Europe, “this aircraft will never have been more relevant” to the company’s operations, Guerard says.
“Omicron has had a major impact for us but we have adapted and continued on our way,” says Guerard. “We have gathered speed again and are ready for a more satisfying summer.”