A strong summer season has put Transat into the black for the full year.
“The fourth quarter, like the summer as a whole, was excellent. Financially, our summer results were among the best in our history and significantly improved our results for the year compared with last year,” said Jean-Marc Eustache, President and CEO.
“From a strategic standpoint, we made great strides towards establishing our hotel division and in several other major areas, including fleet composition, and corporate leadership succession."
However you slice the Q4 numbers, they’re good:
Revenues were $698.6 million for the quarter ended 31OCT, 2017, compared with $612.1 million for the same period in 2016, an increase of $86.4 million, or 14.1%.
Adjusted operating income was $78.5 million, compared with $46.5 million in 2016.
Net income attributable to shareholders amounted to $148.1 million for Q4 2017, compared with $34.9 million in 2016.
Adjusted net income of $46.4 million nearly doubled the $24.2 million ($0.66 per share) in 2016.
Transat says the revenue boost resulted mainly from an 8.7% increase in total travellers in the transatlantic market, the main market for that period, while average selling prices were up 4.0%. TS increased capacity by 8.5%, above the overall market increase of 5%.
In the summer sun market, TS capacity was down 3.8% compared with 2016 due to hurricanes Irma and Maria, which resulted in the repatriation of pax particularly in Cuba and the D.R., and the cancellation of certain flights. As a result, Transat says, total passengers were down 2.7% in that market, while average selling prices rose 7.2%.
The quarter also saw the completion of the sale of Transat’s 35% minority interest in Ocean Hotels to H10 Hotels. Transat took in US$150.5 million [$187.5 million], received in cash.
For the full year, Transat posted revenues of $3.0 billion compared with $2.9 billion in 2016 and quadrupled operating income to $102.0 million from $25.8 million.
The full year showed a recovery from a disappointing winter season when Transat posted an operating loss of $65.7 million compared with $54.2 million in 2016. The company said the deterioration was due to a rise in air costs, higher fuel prices and an unfavourable foreign exchange effect.
On 30NOV, Transat completed the sale of its subsidiary Jonview Canada to Japanese multinational H.I.S. Co. Ltd., which specializes in travel distribution. The selling price was $44.0 million, received in cash on that date.
Looking ahead, Transat says its capacity in the winter outbound sun destination market is up 8% compared with last year. To date, 50% of that capacity has been sold, bookings are ahead by 9.2%, and load factors are similar.
In the transatlantic market, where it is low season, Transat's capacity is up 20% from last winter. To date, 47% of that capacity has been sold, bookings are ahead by 15% and load factors are down 2%.
The company says that if these trends continue, it expects to achieve better results than in the 2017 winter season.
Bruce Parkinson Editor-in-Chief
An observer and analyst of the Canadian and international travel industries for over 25 years, Bruce uses the pre-dawn hours to prepare a daily news and information package to keep industry members up to date.