Transat AT cuts Q1 loss in half at 151M revenue down slightly

Transat A.T. cuts Q1 loss in half at $15.1M; revenue down slightly at $805.7M AddThis Sharing ButtonsShare to TwitterTwitterShare to FacebookFacebookShare to RedditRedditShare to 電子郵件Email MONTREAL – Transat A.T. Inc. has reported a big improvement in first-quarter results but the vacation tour operator remains mired in red ink as its revenue declined on reduced capacity.The Montreal-based operator of Air Transat said its net loss for the three months ended Jan. 31 was $15.1 million or 39 cents per share on a diluted basis.That almost halved its net loss of $29.5 million or 77 cents per share in the same fiscal 2012 period.Revenue slid to $805.7 million from $829.3 million, down $23.6 million or 2.8 per cent.Meanwhile, the company (TSX:TRZ.B) reported an adjusted after-tax loss of $21.6 million or 56 cents per share in the quarter, compared with $29.9 million or 79 cents in 2012.Analysts had expected an adjusted loss of 48 cents per share, excluding a positive impact from fuel hedging activities“Changes brought to our organization over the last 18 months, as well as our decision to slightly reduce capacity, have contributed to the improvement of our results,” president and CEO Jean-Marc Eustache said in a release.The company has been working hard to improve efficiencies, among other things striking deals with its employees to reduce costs.For example, Air Transat’s more than 1,700 flight attendants recently agreed to some $9-million in non-wage concessions to help it meet increasing competition in the holiday travel industry.A key element will see the number of attendants on A330 airliners reduced to 10 from 11. The concessions by the flight attendants, pilots and others are part of moved by Transat to trim $20 million in annual operating costs.The company said it needs to realize the savings in order to develop a fleet of narrow-body Boeing 737s, which the union says should allow the company to retain more jobs in the long run. The 737s would replace airliners flown under subcontract by Nova Scotia-based Canjet since 2009. The Canjet contract ends in April 2014.Ben Vendittelli of Laurentian Bank Securities said Transat’s improved performance is offset by the company’s mixed outlook.“Transat’s improvement was below expectations (and the) outlook remains muddled,” he wrote in a report. “Transat’s improved year-over-year performance, though slightly below our expectations, was driven by good capacity management and higher pricing.”Transat has cut its capacity to sun destinations in the seasonally strong second quarter by 10 per cent, while load factors are lower and pricing is higher.Transat A.T. is an integrated international tour operator that offers package holidays to more than 60 destinations in some 50 countries, but operates mainly in Canada and Europe as well as the Caribbean, Mexico and the Mediterranean Basin.The company said revenues of North American business units, which are generated by sales in Canada and abroad, decreased by $10.1 million or 1.4 per cent in the quarter compared with the same period in 2012.Capacity to sun destinations was down 12 per cent compared with 2012 while that on the transatlantic market was down 18 per cent the company said.North American business units recorded an operating loss before amortization and depreciation of $8.3 million, compared with $19.1 million in 2012. The improvement in margin was mainly attributable to higher selling prices during the quarter.Revenues of European business units, which are generated by sales made in Europe and in Canada, decreased by $13.5 million or 10.5 per cent, mainly due to a decision to reduce capacity. European operations generated an operating loss before amortization and depreciation of $12.7 million, similar to the previous year. by Ross Marowits, The Canadian Press Posted Mar 14, 2013 7:54 am MDT

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