Air Transat Reports Fourth Quarter 2020 Operating Loss of $239.3 Million

Air Transat Reports Fourth Quarter 2020 Operating Loss of $239.3 Million

December 11, 2020 ctn_admin

Air Transat is reporting an operating loss of $239.3 million during the fourth quarter of 2020. That’s a drop of $276.4 million from the fourth quarter of 2019.

The company released its financial numbers for the quarter on Friday after markets closed, and, as expected, they were pretty devastating.

“Our results reflect COVID-19’s devastating impact across the travel industry,” said Jean-Marc Eustache, President and Chief Executive Officer of Transat. “During the year, we took all necessary actions to limit the damage and preserve our cash. The upcoming completion of the transaction with Air Canada should give us the solidity to face the crisis and capitalize on the recovery that should be sparked by the arrival of a vaccine.

“We have put in place a $250.0 million short-term financing facility and are currently working on replacing it, should the transaction not take place, with an overall financing covering our needs for the year 2021. This financing could also be obtained as part of a support program for the industry, as announced by the government.” said Eustache.

Company officials said the global air transportation and tourism industry has faced a collapse in traffic and demand.

“Travel restrictions, uncertainty about when borders will reopen, both in Canada and at certain destinations the Corporation flies to, the imposition of quarantine measures 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.”

“In response to the first wave of the pandemic, the Corporation temporarily suspended its airline operations from April 1 to July 22, 2020. Subsequently, the Corporation implemented reduced summer and winter programs and is continuously making adjustments based on the level of demand and decisions made by health and state authorities.

“The Corporation cannot predict all the impacts of COVID-19 on its operations and results, or precisely when the situation will improve. The Corporation has implemented a series of operational, commercial and financial measures, including cost reduction, aimed at preserving its cash.

“The Corporation is 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 likelihood of the availability of a vaccine in the near future 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.