Transat A.T. Inc. posted declines in revenue, as well as both operating and net income for its 4th quarter ending 31OCT.
The company posted revenues of $612.1 million for the quarter, a decrease of $21.9 million. Adjusted operating income was $46.5 million, compared with $70.8 million in 2015, and net income was $34.9 million, almost cut in half compared with $69.1 million the year before.
Before non-operating items, Transat reported adjusted net income of $24.2 million for Q4 2016, compared with $44.6 million in 2015.
"At the end of the previous quarter, we forecasted that we would have difficulty achieving another record summer in 2016, given the drastic increase in overall supply compared with the year before," said President & CEO Jean-Marc Eustache. "Our prediction proved to be correct. We've had a satisfactory summer season per se, but it was not enough to offset the especially challenging winter, with the end result that we are finishing the year with a slight adjusted net loss, equivalent to about 0.5% of sales."
Transat blamed the revenue decline mainly on lower load factors ( down 3.6%) and lower average selling prices ( down 8.9%) on the transatlantic market, the main market for the Q4 period. The number of pax carried was up 3.4%, but TS capacity rose by 7.4%, while overall transatlantic capacity rose by 14%. Of particular impact were new WS routes from Canada to LGW.
For fiscal 2016, Transat reported revenues of $2.9 billion, compared with $2.9 billion in 2015, and adjusted operating income of $25.8 million, compared with $100.6 million in 2015.
Look for more Open Jaw coverage tomorrow following today’s Transat earnings call.