Air Transat Aiming for July 30 Restart

Air Transat Aiming for July 30 Restart

June 10, 2021 ctn_admin

As vaccination rates rise across Canada, Transat is hoping to gradually resume operations starting July 30.

“Following a quarter without revenues, progress made on vaccinations allows us to plan for a gradual resumption starting July 30,” Annick Guérard, President and Chief Executive Officer said today as the company released its quarterly statement. “We hope that a safe travel recovery plan can be deployed as soon as possible and will lead to a lifting of restrictions in the near future. All indications are that our customers are eager to make use of some of their savings from recent months to travel.

“We’re excited about welcoming them back soon.”

Transat said it had revenues of $7.6 million during the second quarter of this year, which ended April 30. That’s a decrease of $563.7 million (98.7%) compared with 2020.

Guérard said the financing Transat has secured will allow the company to roll out its plan over the coming years.

“Our strong brand, our employees’ commitment and the transformation we have undertaken and which will continue over the coming years will allow us to position ourselves again as our customers’ favourite leisure travel company and become more profitable than before the pandemic,” she said.

The global air transportation and tourism industry has faced a collapse in traffic and demand, Transat said in its quarterly statement. Travel restrictions, uncertainty about when borders will reopen, both in Canada and at certain destinations the Corporation flies to, the imposition of quarantine measures and testing requirements both in Canada and other countries, as well as concerns related to the pandemic and its economic impacts are creating significant demand uncertainty, at least for fiscal 2021.

For the first half of winter 2021, Transat rolled out a reduced winter program. On January 29, 2021, following the Canadian government’s request to not travel to Mexico and the Caribbean, and the introduction of new quarantine measures and COVID-19 testing requirements, Transat announced the complete suspension of all its regular flights and the repatriation of its clients to Canada.

Transat currently expects to resume its operations at the end of July but says it can’t predict all the impacts of COVID-19 on its operations and results, or precisely when the situation will improve.

Transat says it has implemented a series of operational, commercial and financial measures, including new financing and cost reduction measures, aimed at preserving its cash. The company said it’s monitoring the situation daily to adjust these measures as it evolves.

“However, until the Corporation is able to resume operations at a sufficient level, the COVID-19 pandemic will have significant negative impacts on its revenues, cash flows from operations and operating results. While the availability of a vaccine makes it possible to hope for the resumption of operations at a certain level during 2021, the Corporation does not expect such level to reach the pre-pandemic level before 2023,” officials said.

Transat said it’s negotiating with its suppliers, including aircraft lessors, to benefit from cost reductions and changes in payment terms, and is continuing to implement measures to reduce expenses and investments. It also is continuing to make use of the Canada Emergency Wage Subsidy (“CEWS”) for its Canadian workforce, which enabled it to finance part of the salaries of its staff still at work and to propose employees temporarily laid off to receive a part of their salary equivalent to the amount of the grant received, with no work required.