Transat struggles in fiscal third quarter amid lower yields and aircraft groundings

Transat AT, the parent of Canadian leisure operator Air Transat, has posted lower fiscal third-quarter earnings as aircraft availability due to Pratt & Whitney engine issues and lower yields put pressure on the company. The Montreal-based carrier told investors on 12 September that “year-to-date financial performance has been below expectations”. Fiscal third-quarter revenue was slightly down at C$736m ($542m). Adjusted EBITDA was C$41.3m, compared with C$114.8m a year ago. The airline reports an adjusted net loss of C$43m, compared with a profit of C$42m during the same period in 2023. “The intensified competition, industry-wide overcapacity, inefficiencies resulting from the Pratt & Whitney [geared turbofan] engine issue affecting revenue management and the economic uncertainty put downward pressure on airline unit revenues,” the company says. “Demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty,” adds CE Annick Guerard. “Capacity increases throughout the industry also added to competitive pressure and negatively impacted yields.” The airline has launched a new corporate plan called “Elevation” after a strategic review this summer, which is designed to drive long-term growth and is targeting a $100m improvement in annual adjusted EBITDA over the next 18 months.<br/>