Transat Q4 revenue was up by $34.4m (or 120.9 per cent) compared to its revenue of $28.4m in Q4 of last year. The company notes that this increase is the result of it resuming operations at a higher level in 2021 but demand still remains below 2019 levels.
“The winter season that is now beginning will see the continuation of our return to more significant volumes. While we remain cautious given the evolving variants, we remain optimistic that we're on track to returning to normal,” said Annick Guérard, President and Chief Executive Officer, Transat.
For the fiscal year of 2021, Transat saw revenues of $124.8m, a decrease of $1.2 billion (90.4 per cent) compared with 2020
Q4 Highlights
Adjusted net loss for Q4 decreased to $118.3m in 2021 compared to $239.3m in the same period of 2020, an improvement of $121m. The adjusted operating loss for Q4 is $58.4m compared to $90.7m in 2020. According to Transat, the improvement is related to “higher load factors across all of our markets based on increased capacity and unfavourable settlements of fuel-related derivative contracts in 2020.”
Fiscal Year Highlights
For the fiscal year of 2021, as noted, Transat saw revenues of $124.8m, a decrease of 90.4 per cent compared with 2020. For the first half of the winter season, Transat observed weak demand until it suspended its operations on 29JAN 2021. Since its resumption on 30JUL 2021, the company has seen growing demand and load factors which have been higher compared with 2020. However, Transat notes that its capacity still remained lower than in 2019.
In 2021, operations generated an adjusted net loss of $401.2m compared with $426.0m in 2020, a $24.7m improvement. Transat reported an adjusted operating loss of $213.9m in 2021 compared with $122.2m in 2020, a deterioration of $91.7m.
Cash on Hand
As of 31OCT 2021, Transat’s cash and cash equivalents amounted to $433.2m, compared with $426.4m on the same date in 2020.
In total, the available financing represents a maximum of $820m, of which $650m was drawn down as at 31OCT 2021. Of the drawn down amount, a total of $310m was used to repay travellers who were scheduled to leave after 01FEB 2020, for which a travel credit had been issued due to COVID-19 and who had requested to be reimbursed.
Deposits from customers for future travel amounted to $292.2m, compared with $608.9m as of 31OCT 2020, a decrease of $316.7m. According to Transat this change was due to refunds of travel credits made during the summer of 2021.
On 29APR 2021, Transat entered into an agreement with the Government of Canada that allowed it to borrow $310.0mto issue refunds to eligible travellers. The company received requests for about $460.0m and made refunds for “approximately 99 per cent” of amounts claimed as of late NOV 2021.
Off-balance-sheet arrangements, excluding contracts with service providers, stood at $549.8m as of 31OCT 2021. According to Transat, this amount mainly consists of its commitments to take delivery of the seven A321neoLRs undelivered as of 30OCT.
Outlook
With the number of variables affecting the industry and the difficulty in predicting the impact of COVID-19 on future bookings, Transat is unwilling to release a projected outlook for winter 2022.
Although the operator states that the current situation “shows encouraging signs” such as the level of bookings and increased vaccination rates.
Across all of Transat’s markets, average capacity for winter 2022 is 60 per cent of 2019 capacity. For sun destinations, Transat's capacity for winter 2022 represents 55 per cent of 2019 capacity. On the transatlantic program, which Transat notes is the low season, capacity represents 65 per cent of 2019 capacity. Transat’s cross-border market is projecting a capacity growth of 45% compared to 2019 winter season capacity.
According to Transat, it “continues to apply a series of operational, commercial and financial measures, including cost reduction, aimed at preserving its cash.”
Changes to the Board of Directors
Jean-Yves Leblanc and Louis-Marie Beaulieu will cease to act as directors effective on 31DEC 2021. I order to fill these vacancies, the Board appointed Mr. Daniel Desjardins and Ms. Julie Tremblay to the Board, effective 01JAN 2022. Further, Mr. Desjardins was also appointed to the Audit Committee and Ms. Tremblay was appointed to the Human Resources and Compensation Committee effective 01JAN 2022.
Due to Leblanc's departure, the Board of Directors appointed Ms. Lucie Chabot as Chair of the Audit Committee effective 01JAN 2022.
