Faced with slightly lower revenues and a net loss of nearly $40 million in the third quarter, Transat AT launched a “complete review” of its operational and commercial practices this summer with the aim of optimizing the efficiency of its activities.
This new global plan, called the “Elevation Program,” aims to accelerate the execution of the strategic plan and ensure “profitable long-term” growth, explained Transat President and CEO Annick Guérard on Thursday.
The Montreal-based company made the announcement as it reported a net loss of $39.9 million, or $1.03 per share, for the quarter ended July 31. In the same period last year, the company had made a profit of $57.3 million, or $1.49 per share.
Transat’s revenues were down 1.4% in the third quarter. Its income reached $736.2 million, down from $746.3 million in the same period a year ago.
Its revenue reached $736.2 million, down from $746.3 million in the same period a year ago.
Air Transat’s parent company said the decline was due in part to economic uncertainty, increased competition, overcapacity across the industry and issues with Pratt & Whitney’s GTF2 engines.
According to Mme Guérard, “Transat’s third quarter results are explained by the evolution of market conditions and by the pressures that persist across the entire sector.”
“Demand for leisure travel remains strong, as evidenced by traffic growth. However, consumers are becoming increasingly cautious about their spending due to ongoing economic uncertainty,” she said.
“The increase in capacity across the industry has only increased competitive pressures and had a negative impact on unit air revenues,” she added.
With the implementation of its “Elevation Program”, Transat aims to improve its annual adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) by $100 million over the next 18 months.