During a call last week releasing the company’s third quarter results, Transat’s president and CEO Annick Guérard had a positive outlook for the upcoming winter season, coming just months after the company’s resumption of operations on 30JUL.
As Open Jaw reported, in the third quarter ending a day later on 31JUL, Transat had revenues of just $12.5 million, and a net loss attributable to shareholders of $138.1 million.
Transat’s statement indicated it was “impossible for the moment to predict the impact" of the so-called 'fourth wave' of the pandemic and the delta variant on "future bookings, the partial resumption of flight operations and financial results.” The company declined to provide an outlook for summer 2021 or winter 2022, and said it does not expect business to return to pre-pandemic levels “before 2023.”
But Transat’s statement also said, “The current situation shows encouraging signs such as the level of bookings observed and the increase in the vaccination rate.”
That’s a theme Guérard expanded on during a call following the release of the operator’s Q3 results, according to a Canadian Press report.
“Eager to Travel”
“We currently see good trends in the bookings, even if they tend to come in closer to the departure date than they used to,” Guérard said on the call. “People are still cautious, and they decide at the last minute.
“But it is very clear that they are eager to travel.”
Transat is progressively restarting routes and adding capacity. Guérard told the conference call that over 90 per cent of the company’s destinations have reopened, and current operations will increase to 70 flights per week in OCT with 11 aircraft in operation - and continue to grow. Nonetheless, overall winter capacity is still expected to be over one third lower than pre-pandemic.
Still, Guérard said load factors and pricing have been better than anticipated, and she’s “encouraged” especially by the rate of bookings for sun destinations in the Caribbean and Mexico this winter.
Clouds in the Sky
Some analysts were less positive about Transat’s future however.
Aviation consultant and frequent Open Jaw expert analyst Robert Kokonis acknowledged pent-up demand, especially going into the winter. But he also says too many hurdles for returning Canadians - like the pre-departure COVID testing requirement - remain.
“That PCR test requirement does cap demand,” he said.
According to the Canadian Press, National Bank analyst Cameron Doerksen in a note to clients Thursday said, “the amount of leverage (Transat) will be carrying as it emerges from the pandemic is concerning,” but that the company will likely see a “robust rebound” in 2023.
