Canada’s Transat AT lost C$54 million ($39.7 million) in the second quarter of its fiscal year as it faced challenges including Pratt & Whitney (P&W) PW1100G engine issues, strike threats from employees and broad competitive pressures.
The result compares to Transat’s loss of C$29.1 million in the same period last year.
“It’s clear that this year is a challenging one for Transat,” chief executive Annick Guerard said during the company’s 6 June earnings call. She highlighted the P&W engine issues, increased competition, strike threats and an economic slowdown as difficulties. Montreal-based Transat owns leisure-travel-focused airline Air Transat.
On an operating-only basis, Transat lost C$15.2 million in the February-to-April quarter, marking the second operating loss of its 2024 fiscal year. That compares to Transat’s C$18.7 million operating profit during the same period of 2023.
Transat’s revenue during its most-recent quarter increased nearly 12% year on year to C$973 million, on a 16% year-on-year jump in expenses, which came in at C$988 million.
The situation translates into a less-than-stellar summer outlook for Air Transat. The airline anticipates its load factor during the summer season will be roughly two percentage points less than last summer, and predicts its yields will be down roughly 8% year on year.
Guerard said yields remain above 2019 levels, even with the annualised decrease.
Industry capacity, measured in available seat miles, between Canada and Europe will be up nearly 10% this summer compared to last year, Cirium schedule data shows. Capacity on Air Transat, the second-largest airline in the market after Air Canada, will be up more than 6%.
Still, Air Transat is bullish on its prospects. The carrier is reducing its leverage and has launched a new commercial joint venture with Porter Airlines. Guerard said she expects benefits from the new pact, which builds on an existing codeshare, will become more apparent in 2025.
This year, however, the airline must deal with its challenges. Transat has cut its growth forecast for the fiscal year ending 31 October by two percentage points, now anticipating its capacity will increase roughly 11% year-over-year. Transat began the year planning to grow capacity about 19%.
Transat plans to add four Airbus A321LRs and three A330s to its fleet this summer to compensate for aircraft grounded due to the issues with P&W geared turbofan PW1100G engines. The engine maker has recalled thousands of PW1100Gs – one of two engine options offered by Airbus for A320neo-family jets – after finding the powerplants could contain components predisposed to early failure.
Guerard does not specify how many of Transat’s A321LRs are now parked as a result. Transat previously said it had four of the jets grounded and that it expected the number to rise to six by October.
Air Transat’s fleet included eight A321ceos, 15 A321LRs and 13 A330s at the end of April.
