Transat A.T. Inc. - Results for second quarter of 2022

Recovery confirmed with a sharp rise in volume

For the second quarter:

  • Revenues of $358.2 million
  • Adjusted operating loss1 of $51.0 million (operating loss of $87.5 million)
  • Adjusted net loss1 of $111.6 million (net loss of $98.3 million)

Financial position and financing:

  • Unrestricted liquity1 of $515.9 million as at April 30
  • Customer deposits of $494.2 million, representing 80% of pre-pandemic levels and a 60% increase over last quarter, reflecting the recovery in demand

Continuation of the strategic plan:

  • Rebuilding of the pre-pandemic network, with the opening of several routes and the implementation of codeshare agreements
  • Continued fleet renewal, with the expected delivery of two A321neoLRs during the third quarter and five more to come

MONTRÉAL, June 9, 2022 /CNW Telbec/ - Transat A.T. inc., a holiday travel reference worldwide, particularly as an air carrier under the Air Transat brand, announces its results for the second quarter ended April 30, 2022.

"When the effect of Omicron subsided at the end of February, operations and sales rebounded strongly, allowing us to end the quarter on a very encouraging note and generate revenues of $358 million for the period. We foresee a strong recovery and will continue to implement all the measures necessary to capitalize on it," stated Annick Guérard, President and Chief Executive Officer of Transat.

"Sales are progressing in a very satisfactory manner for the summer. The cost of fuel rose sharply, without which we would have reported positive adjusted operating results in April. Nonetheless, we observe that consumers are ready to accept price hikes and we have implemented a fuel hedging program to protect us against significant increases during the summer."

"For the longer term, we continue to implement our strategic plan. While continuing to receive new fuel-efficient aircraft to the fleet, we continue to develop our network by adding new destinations and connections, with or without code sharing. We also benefit from our employees' strong support, including our pilots with whom we have entered into a three-year agreement, ensuring stability for the coming period," concluded Ms. Guérard.

Second quarter highlights

Compared with 2021, revenues for the quarter ended April 30, 2022 were up $350.6 million, driven by the significant resumption of operations after the effect of Omicron subsided at the end of February. Revenue growth in the quarter was dampened by the sharp decline in demand and massive booking cancellations following the emergence of the Omicron variant during the first quarter and the new restrictive measures put in place by the federal government on December 15, 2021. As a result, the Corporation initially cancelled nearly 30% of flights scheduled from January to the end of February. In addition, at the beginning of February, the Corporation cancelled more winter season flights, thereby reducing total winter season capacity by approximately 22% of the initially deployed capacity.

Operations resulted in an operating loss of $87.5 million, comparable to the $86.5 million loss in 2021, as fuel prices surged 75.5% during the quarter, compared with 2021. Transat reported an adjusted operating loss1 of $51.0 million, identical to the 2021 result.

Net loss attributable to shareholders amounted to $98.3 million or $2.60 per share (diluted) compared with $69.6 million or $1.84 per share (diluted) for the corresponding quarter of last year. The net loss attributable to shareholders in 2022 was marked by a $7.4 million foreign exchange loss and partially offset by a $22.2 million gain on long-term debt modification related to the renegotiation of the unsecured financing - LEEFF. The net loss attributable to shareholders in 2021 was mitigated by a $29.8 million foreign exchange gain. Foreign exchange gains and losses resulted mainly from the exchange effect on lease liabilities related to aircraft, following the fluctuations of the dollar against the U.S. dollar. Excluding non-operating items, Transat reported an adjusted net loss1 of $111.6 million ($2.95 per share) for the second quarter of 2022, compared with $103.3 million ($2.74 per share) in 2021.

Financial position

As at April 30, 2022, cash and cash equivalents amounted to $511.2 million, compared with $346.1 million at the same date in 2021. In total, the available financing amounted to a maximum of $863.3 million, of which $858.6 million was drawn down, for unrestricted liquidity1 of $515.9 million.

Customer deposits for future travel stood at $494.2 million, representing 80% of pre-pandemic levels (as at April 30, 2019) and up 60% from last quarter, reflecting the strong recovery in demand.

In addition, management is pursuing discussions with all current lenders, in a spirit of continued collaboration, regarding amendments to the existing financing agreements in order to ensure greater financial flexibility to the Corporation.

Continuing the recovery and implementing the strategic plan

The recovery that was temporarily slowed down by the Omicron variant is now firmly entrenched and the Corporation continues to implement its strategic plan and take the necessary measures to make the most of the rebound in demand, both for the summer and in the longer term.

  • Rebuilding and developing the network with:
    • the reopening of most of the pre-pandemic network routes
    • codeshare agreements with WestJet (bookings now open) and Porter (opening scheduled for the fall)
    • new destinations (particularly Los Angeles and San Francisco)
    • new direct flights (such as Montréal-Amsterdam or Québec City-London)
    • improved network operations through the addition of connections on existing routes to and from Europe and the United States (such as Paris-San Francisco or London-Los Angeles with a stopover in Montréal)
    • numerous additional routes possible via the connectair by Air Transat platform through virtual interlining agreements with eight airline companies offering over 245 destinations in Europe, North Africa, the Middle East, Central and South America, and Canada

With all these initiatives, the Corporation will offer more than 1,200 itineraries (including 550 with Transat) in summer 2022, compared with about 500 in 2019

  • Receipt of two new A321neoLR aircraft during the summer and waiting for five on order which will allow the transformation and optimization of the fleet, bringing the number of aircraft of this type to 17
  • Continuing efforts to control costs and limit the use of cash
  • Introduction of a fuel hedging program to offset a potential further increase in prices during the summer
  • Entering into an agreement in May 2022 with the Air Line Pilots Association, International (ALPA), representing all of Transat's pilots, extending the term of their current collective agreement by three years.

Following the recent announcements regarding the easing of health measures and travel restrictions by various governments in Canada and other countries, the current situation is showing very encouraging signs in terms of bookings as the last-minute booking trend persists. After the low reached during the Omicron wave, load factors have largely improved in recent months, reaching 85% on flights from March to May for the south destinations program, the Corporation's main market for the period, which bodes well for the summer peak season. Selling prices of bookings for the summer season have been steadily increasing since the start of spring across all our programs.

Across all our markets, the planned capacity for summer 2022 represents 89% of the 2019 capacity. For the transatlantic program, the Corporation's main market for the summer season, the planned capacity in 2022 is 75% of the 2019 levels. In the sun destinations program, the Corporation's planned capacity represents 98% of the 2019 levels. Moreover, the Corporation plans to increase its presence in the transborder market by quadrupling its capacity compared with 2019 by offering, among other things, new flights from Montréal to Los Angeles and San Francisco. Lastly, the Corporation also plans to increase its capacity by 5% in the domestic market compared with 2019.

Fuel prices, if they remain at the current level, are however creating strong pressure on our operating costs and profitability. As discussed above, the Corporation is making every effort to offset these effects and improve its performance.

It remains difficult at this time to forecast the evolution of the health and economic situation or its impact on bookings and future financial results with sufficient precision for the Corporation to present a more comprehensive outlook for the third quarter and summer of 2022.

Additional Information

The results were affected by non-operating items, as summarized in the following table: 

Highlights and Non-IFRS financial measures

(In thousands of C$)


Second quarter 

First six-month period











Operating loss





Special items



Depreciation and amortization





Adjusted operating loss1






Net loss attributable to shareholders





Special items



Fuel-related and other derivatives





Revaluation of liability related to warrants





Gain on long-term debt modification



Gain on asset disposals





Foreign exchange loss (gain)





Adjusted net loss1






Diluted loss per share





Special items



Fuel-related and other derivatives





Revaluation of liability related to warrants





Gain on long-term debt modification



Gain on asset disposals




Foreign exchange loss (gain)





Adjusted net loss per share1






As at
April 30, 2022

As at
October 31, 2021

Cash and cash equivalents




Undrawn funds from credit facilities




Unrestricted liquidity1




As the Corporation has ceased to recognize deferred tax assets, the presentation of the adjusted loss before tax expense has been suspended, this result being similar to the adjusted net loss, which continues to be presented.

About Transat

Founded in Montreal 35 years ago, Transat has grown to become a holiday travel reference worldwide, particularly as an air carrier under the Air Transat brand. Voted World's Best Leisure Airline by passengers at the Skytrax World Airline Awards, it flies to international and Canadian destinations, striving to serve its customers with enthusiasm and friendliness at every stage of their trip or stay, and emphasizing safety throughout. Transat has been Travelife-certified since 2018, renewing its fleet with the greenest aircraft in their category as part of a commitment to a healthier environment, knowing that this is essential to the integrity of its operations and the magnificent destinations it serves (TSX: TRZ)

(1) Non-IFRS financial measures

Transat prepares its financial statements in accordance with International Financial Reporting Standards ["IFRS"]. We will occasionally refer to non-IFRS financial measures in the press release. These non-IFRS financial measures do not have any meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. They are intended to provide additional information and should not be considered as a substitute for measures of performance prepared in accordance with IFRS. All dollar figures are in Canadian dollars unless otherwise indicated.

The following are non-IFRS financial measures used by management as indicators to evaluate ongoing and recurring operational performance.

Adjusted operating income (loss): Operating income (loss) before depreciation, amortization and asset impairment expense, restructuring charge and other significant unusual items, and including premiums for fuel-related derivatives and other derivatives matured during the period. The Corporation uses this measure to assess the operational performance of its activities before the aforementioned items to ensure better comparability of financial results.

Adjusted net income (loss): Net income (loss) attributable to shareholders before net income (loss) from discontinued operations, change in fair value of fuel-related derivatives and other derivatives, revaluation of liability related to warrants, gain (loss) on long-term debt modification, gain (loss) on business disposals, gain (loss) on asset disposals, restructuring charge, asset impairment, foreign exchange gain (loss), reduction in the carrying amount of deferred tax assets and other significant unusual items, and including premiums for fuel-related derivatives and other derivatives that matured during the period, net of related taxes. The Corporation uses this measure to assess the financial performance of its activities before the aforementioned items to ensure better comparability of financial results. Adjusted net income (loss) is also used in calculating the variable compensation of employees and senior executives.

Adjusted net income (loss) per share: Adjusted net income (loss) divided by the adjusted weighted average number of outstanding shares used in computing diluted earnings (loss) per share.

Unrestricted liquidity: The sum of cash and cash equivalents and available undrawn funds from credit facilities. The Corporation uses this measure to assess the total potential cash available in the short term.

Conference call

Second-quarter 2022 conference call: Thursday, June 9, 10:00 a.m. Dial 1 800 926-9795 or 1 212 231-2919. Name of conference: Transat. Webcast: follow this link. The archived call will be available at 416 626-4100 or 1 800 558-5253, access code 22015315, until July 10, 2022.

The third quarter results will be announced on September 8, 2022.

Caution regarding forward-looking statements

This press release contains certain forward-looking statements with respect to the Corporation, including those regarding its results, its financial position, the impacts of the coronavirus ["COVID-19"] pandemic, its outlook for the future and planned measures, including in particular the gradual resumption of certain flights and actions to improve its cash flows. These forward-looking statements are identified by the use of terms and phrases such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "will," "would,", the negative of these terms and similar terminology, including references to assumptions. All such statements are made pursuant to applicable Canadian securities legislation. Such statements may involve but are not limited to comments with respect to strategies, expectations, planned operations or future actions. Forward-looking statements, by their nature, involve risks and uncertainties that could cause actual results to differ materially from those contemplated by these forward-looking statements.

As at April 30, 2022, a material uncertainty exists that may cast significant doubt on the Corporation's ability to continue as a going concern. The MD&A's Section 7. Financial position, liquidity and capital resources and Note 2 to the interim condensed consolidated financial statements contain more detail on this issue.

The global air transportation and tourism industry has faced a collapse in traffic and demand. Travel restrictions introduced by numerous countries, vaccination and testing requirements in Canada and in other countries, as well as concerns related to the pandemic and its economic impacts are creating some demand uncertainty, at least for fiscal 2022. For the 2022 winter season, the Corporation rolled out a reduced winter program that had to be adjusted following the emergence of the Omicron variant and new restrictive measures implemented by Canada and other countries. For the summer 2022 season, the Corporation has also deployed a further reduced program although much more similar to pre-pandemic levels. While the situation considerably improved during the quarter, the Corporation cannot yet predict with certainty all the impacts of COVID-19 on its operations and results, the pace at which the situation will improve or precisely when conditions will become normal again. Since the beginning of the pandemic, the Corporation implemented a series of operational, commercial and financial measures, including new financing and cost reduction measures, aimed at preserving its cash. The Corporation is monitoring the situation daily to adjust these measures as it evolves. However, until the Corporation is able to resume operations at a sufficient level, the COVID-19 pandemic will have significant negative impacts on its revenues, cash flows from operations and operating results. Although the lifting of certain restrictions has allowed a significant resumption of operations during 2022, the Corporation does not expect to reach the pre-pandemic level before 2023.

The forward-looking statements may differ materially from actual results for a number of reasons, including without limitation, economic conditions, changes in demand due to the seasonal nature of the business, extreme weather conditions, climatic or geological disasters, war, political instability, real or perceived terrorism, outbreaks of epidemics or disease, consumer preferences and consumer habits, consumers' perceptions of the safety of destination services and aviation safety, demographic trends, disruptions to the air traffic control system, the cost of protective, safety and environmental measures, competition, the Corporation's ability to maintain and grow its reputation and brand, the availability of funding in the future, fluctuations in fuel prices and exchange rates and interest rates, the Corporation's dependence on key suppliers, the availability and fluctuation of costs related to our aircraft, information technology and telecommunications, changes in legislation, unfavourable regulatory developments or procedures, pending litigation and third party lawsuits, the ability to reduce operating costs, the Corporation's ability to attract and retain skilled resources, labour relations, collective bargaining and labour disputes, pension issues, maintaining insurance coverage at favourable levels and conditions and at an acceptable cost, and other risks detailed in the Risks and Uncertainties section of the MD&A included in our 2021 Annual Report.

The reader is cautioned that the foregoing list of factors is not exhaustive of the factors that may affect any of the Corporation's forward-looking statements. The reader is also cautioned to consider these and other factors carefully and not to place undue reliance on forward-looking statements.

The forward-looking statements in this press release are based on a number of assumptions relating to economic and market conditions as well as the Corporation's operations, financial position and transactions. Examples of such forward-looking statements include, but are not limited to, statements concerning:

  • The outlook whereby until the Corporation is able to resume operations at a sufficient level, the COVID-19 pandemic will have significant negative impacts on its revenues, cash flows from operations and operating results.
  • The outlook whereby, subject to going concern uncertainty as discussed in Section 7. Financial position, liquidity and capital resources of the MD&A and Note 2 to the interim condensed consolidated financial statements, we believe that the Corporation will be able to meet its obligations with cash on hand, cash flows from operations and drawdowns under existing credit facilities.

In making these statements, the Corporation has assumed, among other things, that travel and border restrictions imposed by government authorities will be relaxed to allow for a resumption of operations of the type and scale expected, that the standards and measures imposed by government and airport authorities to ensure the health and safety of personnel and travellers will be consistent with those announced or currently anticipated, that travellers will continue to travel despite the new health measures and other constraints imposed as a result of the pandemic, that workers will continue to be available to the Corporation, its suppliers and the companies providing passenger services at the airports, that credit facilities and other terms of credit extended by its business partners will continue to be made available as in the past, that management will continue to manage changes in cash flows to fund working capital requirements for the full fiscal year. If these assumptions prove incorrect, actual results and developments may differ materially from those contemplated by the forward-looking statements contained in this press release.

The Corporation considers that the assumptions on which these forward-looking statements are based are reasonable.

These statements reflect current expectations regarding future events and operating performance, speak only as of the date this press release is issued, and represent the Corporation's expectations as of that date. For additional information with respect to these and other factors, see Section 1. Caution regarding forward-looking statements of the MD&A for the quarter ended April 30, 2022 filed with the Canadian securities commissions and available on SEDAR at The Corporation disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by applicable securities legislation.

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SOURCE Transat A.T. Inc.

Media: Christophe Hennebelle, Vice-President, Human Resources and Corporate Affairs, 514-987-1660, ext. 4584; Financial analysts: Patrick Bui, Chief Financial Officer, 514 987-1660