Despite posting a fourth-quarter loss, Canadian leisure carrier Air Transat is showing signs of optimism regarding the company’s current state of affairs. Announcing its financial results for both the fourth quarter and the fiscal year ending October 31st as a whole, the Montréal-based airline believes it is heading towards normality, and has big plans for next year.
A fourth-quarter loss
Earlier this week, Air Transat published its latest set of financial results. A key headline for the fourth quarter of the fiscal year ending October 31st was the fact that it made both operating and net losses despite having resumed its operations earlier in the summer.
The airline’s operating losses for the fourth quarter amounted to CAD$118.3 million. Accounting for special items, depreciation, and amortization, this generated an adjusted operating loss of CAD$58.4 million. This represents an improvement compared to the fourth quarter or 2020, whereby Air Transat’s adjusted operating loss was CAD$90.7 million.
Meanwhile, the airline’s adjusted net loss amounted to CAD$118.4 million, compared to CAD$156.4 million for the same period in 2020. Air Transat also saw a significant comparative increase in revenue, generating 120.9% more than in Q4 of 2020 (CAD$62.8 million vs CAD$28.4 million respectively). But how did things look for the year as a whole?
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The year as a whole has been challenging
In terms of the fiscal year as a whole, Air Transat’s overall revenues dropped by more than 90%. Having amounted to CAD$1.3 billion in 2020, they fell to just CAD$124.8 million this year. A key factor in this was the fact that the airline suspended its operations for six months owing to uncertainty surrounding travel restrictions. Air Transat explains that:
“Due to the global COVID-19 pandemic, the Corporation suspended its airline operations on January 29, 2021 for the second time since March 2020, until their partial resumption on July 30, 2021. For the first half of winter, demand was very weak and the Corporation’s capacity represented a fraction of the 2020 level.”
The airline’s annual adjusted net loss also worsened year on year, from CAD$355.3 million in 2020 to CAD$446.4 million in 2021. However, it saw an improvement in its annual adjusted operating loss, which dropped from CAD$426 million to CAD$401.2 million.
Renewed optimism looking to 2022
Despite the financial struggles that Air Transat has faced in the last quarter, and indeed the year as a whole, it continues to express optimism about its direction. Looking to the future, the airline’s President and CEO, Annick Guérard, stated that:
“Since we resumed operations on July 30, business has been growing steadily. We met and exceeded our targets for resumption of operations in the last quarter and reduced our use of cash. 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.”
Going forward, Air Transat has big plans to re-grow its network in 2022. As Simple Flying reported in November, it is aiming to serve 44 destinations with 250 weekly flights next summer. These include new routes to the likes of Amsterdam and London Gatwick.
What do you make of Air Transat’s recent results? How do you see the next few months panning out for the carrier? Let us know your thoughts in the comments.
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