Air Transat’s Q1 results show demand for leisure travel is up
Air Transat has posted its first quarter results ended Jan. 31, 2024, with all signs pointing to a an increased demand for leisure travel.
According to Annick Guérard, president and CEO of Transat, revenues grew 17.7 per cent year-over-year, driven by a solid traffic increase. However, she notes, the persisting speculation of a strike by flight attendants starting last November clearly affected bookings and yield for the winter season.
“We are pleased that the adoption of a new collective agreement in late February removed this uncertainty,” Guérard said. “As for the operating challenges related to the Pratt & Whitney GTF2 engine issue, costs incurred, including those related to the temporary leasing of additional aircraft, applied pressure on profitability. Finally, while demand remains sound, softer yields indicate heightened consumer price sensitivity in the current macro-economic environment as well as fierce price competition, especially in the Toronto market.”
First quarter results
For the three-month period ended Jan. 31, 2024, revenues reached $785.5 million, up 17.7 per cent from $667.5 million in the corresponding period a year ago.
The increase reflects sustained demand for leisure travel driven by a 20 per cent increase in traffic expressed in revenue-passenger-miles (RPM). However, this increase was mitigated by persistent speculations throughout the quarter about a potential strike by the flight attendants. Company-wide capacity was up 25 per cent from last year, while airline unit revenues (yield) was down 3.1 per cent.
Cash flow from operating activities amounted to $110.7 million during the First Quarter of 2024, compared with $195.1 million for the same period last year, due to a less favorable net change in non-cash working capital balances and to a greater operating loss this year.
Early trends for 2024
Early trends for the summer season indicate bookings and pricing conditions that are largely in line with the same period last year.
However, as the Corporation does not foresee the same uplift in yields that was exhibited throughout the summer season last year, it will remain proactive in managing costs under its control, while actively seeking to mitigate the structural cost increases affecting the industry.
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