Transat A.T. Inc. Net income of $14.2 million for the Second Quarter, after a Demanding Winter Season



- Second quarter revenues reached $623.3 million, down 9.6% from the second quarter of 2001.
- The decrease is mainly attributable to the Canadian market subsequent to the events of September 11, 2001.
- Transat recorded net income of $14.2 million for the quarter, or $0.42 per share.
- For the first six months, the Corporation recorded revenues of $1.1 billion and a net loss of $3.3 million.
- Transat's financial position is very sound. Cash and cash equivalents were $222.4 million at the end of the quarter.

Transat A.T. Inc., one of the 10 leading tour operators in the world and the leader in the vacation travel industry in Canada, recorded revenues of $623.3 million for the second quarter ended April 30, 2002, a decrease of 9.6% from $689.7 million for the second quarter of 2001.

'The market is gradually recovering from the events of September 11, 2001,' stated Jean-Marc Eustache, President and Chief Executive Officer of Transat A.T. Inc. 'During the first quarter, the Corporation recorded a 13.2% drop in revenues compared with the same quarter in 2001,' he added. For the quarter ended April 30, 2002, the Corporation reported net income of $14.2 million ($0.42 per share), compared with net income of $16.5 million ($0.51 per share) for the same period last year.

For the six-month period ended April 30, Transat recorded revenues of $1.1 billion in 2002, compared with $1.2 billion in 2001, a decrease of 11.2%. 'For the six months that make up our winter season, sales volumes--mainly in Canada--declined compared with the previous winter, essentially due to a drop in demand resulting from the events of September 11, 2001,' continued Mr. Eustache.

In addition, margins and load factors were under pressure, a normal result of the state of demand. For the six-month period, the Corporation recorded a net loss of $3.3 million, ($0.12 per share), compared with net income of $15.9 million ($0.49 per share), in 2001.

'The substantial effort devoted to controlling expenditures and the drop in the cost of fuel had a favourable impact on our results. Other factors, such as the strength of the U.S. dollar, the increase in certain costs and the drop in interest revenues had the reverse effect. It has been without a doubt a very demanding winter with weakened demand and excess supply. Our organization is stronger as a result, and is in a better financial position,' stated Mr. Eustache.

In Canada, supply and demand are in a delicate balance, especially for certain destinations. The summer season presents a challenge, especially with regard to margins and the management of last-minute bookings. This situation is above all due to the impact on travel intentions of the events of September 11, 2001, an impact that is decreasing but is still being felt.

Nevertheless, booking volumes are satisfactory and at a level anticipated by the Corporation. In Europe, which accounts for about 40% of Transat's revenues, the effect on demand of the events of September 11, 2001, was less pronounced but the market is showing some signs of weakness as a result of political and sports events.

About Transat A.T. Inc.
Transat A.T. Inc. with its head office in Montreal is an integrated company specializing in the organization, marketing, and distribution of holiday travel. The core of its business consists of tour operators in Canada and France. Transat is also involved in air transportation, hotel management, and value-added services offered at travel destinations as well as in distribution through both travel agency networks and e-commerce initiatives. Transat A.T. Inc. is a public corporation listed on the Toronto Stock Exchange (TSE:TRZ). In 2001, Transat had revenues of more than $2 billion.