Transat Calls Q3 Results “Very Satisfying”

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Transat A.T. Inc. recorded an adjusted operating income of $46.5 million in the 3rd quarter of 2015, compared with $47.8 million in the year-before period. Revenues were $920.1 million, down 2.3%. Before non-operating items, Transat reported a quarterly adjusted net income of $27.2 million in 2015, compared with $26.7 million in 2014.

"Once again, the 1st half of the summer proves very satisfying, especially on the transatlantic market, which is core at this time of year,” said President & CEO Jean-Marc Eustache. “Our results are similar to last year and among the best in our history for this quarter, this despite softened demand in France, which has been impacted by a series of international crises and a weaker euro."

Transat said the revenue decline is mainly attributable to a lower rate of conversion for revenues generated in euros, which was weaker quarter over quarter.

During the quarter, Transat’s capacity was down 1.6% on the transatlantic market and up 13.8% higher on sun destinations, increasing the number of travellers by 2.6% on all market segments. Average selling prices were lower than in 2014, mainly the consequence of lower fuel costs.

Ocean Hotels, which is 35% owned by Transat, contributed $1.6 million to the Corporation's quarterly net income, compared with $1.0 million in 2014. Transat's equity participation in Ocean Hotels accounted for $96.5 million in assets as of July 31, 2015, compared with $94.5 million as of April 30, 2015.

For the 9 months of the fiscal year-to-date, Transat posted revenues of $2.7 billion, compared with $2.9 billion in 2014, and an adjusted operating income of $14.1 million, compared with $23.9 million for the same period of 2014. The decrease in revenues stems mainly from a corporate decision to reduce winter capacity on sun destinations by 6.3%, fueling a 7.4% decrease in the global number of travellers.

As at 31JUL15, the Corporation's free cash totalled $515.6 million, compared with $497.1 million at the same date in 2014.

Looking ahead, Transat says the transatlantic market outbound from Canada and Europe accounts for a substantial portion of summer season business. For the period August to October 2015, Transat's capacity is up 3% compared with the summer of 2014. To date, 83% of the capacity has been sold. Load factors are down 1.2% and selling prices of bookings taken are approximately 3.2% lower, compared with the same date in 2014.

If the CAD remains at its current value against the USD, the euro and the pound, and if fuel prices remain stable, operating expenses will be down 4.4%.

On the Sun destinations market outbound from Canada, for which summer is low season, Transat's capacity is higher by 11% than the previous year. To date, 77% of that capacity has been sold. Load factors are down 1.1% and selling prices are 3.0% higher. If the CAD remains at its current value against the USD, and if fuel prices remain stable, operating expenses will be up 5.0%. 

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