Clarification regarding our results for third quarter 2014
Transat reported its third quarter results on September 11, 2014. Adjusted net income, which is a good reflection of the company's actual performance in light of market conditions, was 13% inferior to those of Q3, 2013, when Transat had a record summer season. The results reported yesterday were actually among the best ever for that quarter. In addition, they were recorded when capacity on Transat European destinations was 10% higher. In other words, despite demanding market conditions, Transat had a very good quarter, better than expected by several financial analysts.
Net income, for its part, was 37% lower than in 2013, as this line of financial statements includes non cash, non operational items, most notably mark-to-market accounting of fuel hedging contracts. About $12 million out of the $15 million negative variance, quarter over quarter, relates to said mark-to-market accounting.
Some news outlets, including The National Post and the Toronto Star, wrongly connected a "37% plunge in profit" with market conditions during the quarter, largely due to erroneous dispatches from the Canadian Press, and thus are this morning conveying an inaccurate picture of Transat's performance during the quarter. Reporters unfamiliar with accounting or financial statements interpretation can consult our website, which contains a backgrounder on mark-to-market accounting, call us, or seek outside expertise.