Without Air Canada or Pierre Karl Péladeau, Transat AT no longer talks about marriage, but is still looking for travel companions towards the resumption of the airline industry. The Montreal carrier, whose activities are still heavily affected by the pandemic, hopes to announce partnership agreements in the fall.
These “alliances” would aim to share certain routes with other carriers, said Annick Guérard, president and CEO, during a conference call. The names of potential partners have not been released, but discussions have been taking place with several companies in recent months.
After deciding to leave the hospitality industry, Transat found it needed to expand the number of destinations it offers. “Partnerships and alliances will be a centerpiece of the development of our network in the short, medium and long term,” said the manager, who was promoted from chief operating officer to ceo last May. “We want to conclude agreements that will allow us to make rapid gains while building a relationship of trust that could lead us to a larger strategic alliance. “
These discussions come a few months after the abandonment, last April, of the offer to acquire Transat by Air Canada. The businessman Pierre Karl Péladeau had also expressed his interest, but discussions with the CEO of Quebecor ceased in June.
An uncertain recovery
Transat is still in the early stages of resuming its activities. The carrier has gradually resumed its flights since July 30, after having suspended its activities for a second time in January. The company is still operating at a loss.
At the moment, Mme Guérard finds the first signs in terms of reservations and demand to be “encouraging”. During the summer, the aircraft occupancy rate was around 85%, with fewer flights, however. Revenue per passenger was similar to that seen before the pandemic.
Partnerships and alliances will be a cornerstone in the development of our network
The winter season, an important time for sun destinations, should be better than last year, believes the manager. It is still early to make forecasts, she notes, because of the uncertainty surrounding the fourth wave and the fact that customers tend to book “at the last minute”. Transat’s offer is 35% lower than before the pandemic for the winter. “If ever the demand is higher, we will adjust to seize the opportunities. “
Refund of canceled flights
The company also provided an update on reimbursement for travelers whose flights were canceled due to COVID-19. She remitted $ 265.1 million to her clients. It received reimbursement requests representing 80% of the amount of credits issued and reimbursed 90% of the amounts claimed. Customers had until August 26 to submit their request. In April, Transat reached an agreement with Ottawa allowing it to borrow up to $ 700 million on condition of repaying its customers.
Given the harsh industry conditions, investors place more importance on managing the company’s cash flow than on its book income or losses.
In the third quarter, the company drew about $ 20 million per month from its reserves to maintain operations. This is less than the monthly pace of $ 30 million in the previous quarter and the lowest threshold in 12 months. The company’s cash position was up $ 83 million from the previous quarter to $ 429 million, an increase due to the use ofindebtedness.
“We are encouraged by the better-than-expected management of liquidity,” said Benoit Poirier, of Desjardins Capital Markets. That being said, we prefer to wait for more details on the shape of the takeover and the ability of management to put its strategic plan into motion. “
Transat reports that its net loss attributable to shareholders for the third quarter (ended July 31) stood at $ 138.1 million, or $ 3.66 per diluted share, compared to $ 45.1 million. of dollars, or $ 1.20 per diluted share, in the corresponding quarter of fiscal 2020. At $ 12.5 million, revenues were up 31.4% compared to the same period last year , but still 98% below their pre-pandemic threshold. The adjusted loss per share is $ 3.06.
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