A restructuring is looming at Transat AT, which is currently combing through its activities in an effort to restore its financial luster as the leisure travel specialist struggles to regain altitude.
In reviewing its third-quarter results on Thursday, where financial performance fell short of analysts’ expectations, the leisure travel specialist outlined a plan that should enable it to improve its profits by around €100 million over the next 18 months.
“This program, which began this summer, focuses on a complete review of our operational and commercial practices,” said Transat President and CEO Annick Guérard.
The head of the Montreal-based company did not, however, provide details on the decisions that could be put forward, such as staff reductions.
As for the months of May, June and July, the company with the blue star plunged into the red, posting an operating loss of 10 million, compared to a profit of 64 million for the same period in 2023.
Its revenues contracted by 1.4% to $736 million. Transat attributes this performance to a drop in unit revenues – a key performance indicator in the airline industry – of around 9.7%, which was partially offset by a 2.8% increase in traffic.
For its part, the net loss amounted to 39.9 million, or $1.03 per share, compared to a profit of 57 million, or $1.49 per share, in the third quarter of the previous fiscal year.
Analysts surveyed by financial data firm Refinitiv had expected revenue of $750 million on a net loss per share of 70 cents.
“With a tough fourth quarter ahead and a winter likely to be marked by competitive capacity combined with a slowdown in consumer demand, we do not believe results will improve significantly in the coming quarters,” National Bank Financial analyst Cameron Doerksen said in a note.
Since the beginning of the year, Transat shares have fallen 49% on the Toronto Stock Exchange.