Omicron eats into Transat sales as fuel costs rise, but summer bookings look bright
Transat felt the pain of the Omicron variant last quarter, but saw bookings rebound as COVID-19 measures eased, leaving the tour operator’s CEO “cautiously optimistic” but wary of skyrocketing fuel prices. Between mid-December and mid-January, cancellations outpaced bookings as the new coronavirus strain mushroomed, reversing an upward sales trend through the fall. The swerve forced the company to cancel 30% of its January flights and prompted a $114m net loss in the quarter ended Jan. 31, a drop of 89% from losses a year earlier. But reservations began to climb again seven weeks ago, said CE Annick Guérard. In fact, bookings during the week of Feb. 15 — when the federal government announced it would roll back testing and self-isolation rules and lift its advisory against international travel — exceeded those from the same period in 2019. While flight volume now sits just below half of pre-pandemic levels, by this summer Transat expects to operate at 90% of its 2019 capacity as ticket sales ramp up, with eight fewer aircraft allowing for higher fleet utilization. “We remained convinced from the start that this Omicron wave was a bump in the road and not something that was there to last. We have certainly taken a hit for the winter, but we are confident that our summer will still unfold as we had initially planned,” Guérard told analysts Thursday. Russia’s invasion of Ukraine two weeks ago, which she called an “inconceivable attack,” has not impacted bookings to Europe. But sanctions and import bans on Russian oil have helped push fuel prices to record highs, directly affecting airlines. Guérard said Transat is “adapting” its pricing structure in response, and noted its long-range A321neo jetliners — known for their fuel efficiency — will be critical for cost savings on its 69 transatlantic routes this summer. CFO Patrick Bui said Transat may consider fuel hedging.<br/>“It is obviously very volatile,” he said. “Now we are currently unhedged, but that may change in the future.”<br/>
https://portal.staralliance.com/cms/news/hot-topics/2022-03-11/unaligned/omicron-eats-into-transat-sales-as-fuel-costs-rise-but-summer-bookings-look-bright
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Omicron eats into Transat sales as fuel costs rise, but summer bookings look bright
Transat felt the pain of the Omicron variant last quarter, but saw bookings rebound as COVID-19 measures eased, leaving the tour operator’s CEO “cautiously optimistic” but wary of skyrocketing fuel prices. Between mid-December and mid-January, cancellations outpaced bookings as the new coronavirus strain mushroomed, reversing an upward sales trend through the fall. The swerve forced the company to cancel 30% of its January flights and prompted a $114m net loss in the quarter ended Jan. 31, a drop of 89% from losses a year earlier. But reservations began to climb again seven weeks ago, said CE Annick Guérard. In fact, bookings during the week of Feb. 15 — when the federal government announced it would roll back testing and self-isolation rules and lift its advisory against international travel — exceeded those from the same period in 2019. While flight volume now sits just below half of pre-pandemic levels, by this summer Transat expects to operate at 90% of its 2019 capacity as ticket sales ramp up, with eight fewer aircraft allowing for higher fleet utilization. “We remained convinced from the start that this Omicron wave was a bump in the road and not something that was there to last. We have certainly taken a hit for the winter, but we are confident that our summer will still unfold as we had initially planned,” Guérard told analysts Thursday. Russia’s invasion of Ukraine two weeks ago, which she called an “inconceivable attack,” has not impacted bookings to Europe. But sanctions and import bans on Russian oil have helped push fuel prices to record highs, directly affecting airlines. Guérard said Transat is “adapting” its pricing structure in response, and noted its long-range A321neo jetliners — known for their fuel efficiency — will be critical for cost savings on its 69 transatlantic routes this summer. CFO Patrick Bui said Transat may consider fuel hedging.<br/>“It is obviously very volatile,” he said. “Now we are currently unhedged, but that may change in the future.”<br/>
