Owner of Canada’s Air Transat on track for a return to profitability

Canada’s Transat, which sells vacation packages, said it’s “moving toward a gradual return to profitability,” underpinned by strong demand and high prices. The Montreal-based company, which owns and operates the airline Air Transat, gave its assessment during an earnings call with investors on Thursday. For its fiscal first quarter — covering the offpeak months of November, December, and January — Transat reported a negative 6 percent operating margin. Losses are not uncommon for Canadian travel companies during winters; Air Canada recently reported a negative 1 percent operating margin for its October-to-December quarter. (Note that Air Canada and Transat agreed to merge in 2019, but the deal collapsed in 2021, after European Union competition regulators signaled their disapproval). Transat’s bookings for the upcoming spring and summer seasons look strong, enough so for CEO Annick Guérard to declare: “Transat is on an upswing and is headed for a return to profitability.” She added: “These results are especially encouraging since the first quarter, which falls in the shoulder period, is usually the lowest of the year.” The company aims for a positive operating margin of between 4 and 6% for the full fiscal year that ends in October. During the fiscal Q1, capacity was roughly back to 2019 levels, while load factors reached a healthy 85%. During winters, much of Air Transat’s flying is to southern sunshine destinations in Florida, Mexico, and the Caribbean. During summers, it pivots to a more Europe-focused schedule. <br/>