Air Transat self service check-in kiosks are seen at Montreal-Trudeau International Airport in Montreal, on Friday, July 31, 2020. THE CANADIAN PRESS/Paul Chiasson

Transat AT reports huge loss in Q4 as shareholders weigh Air Canada takeover bid

Transat AT reports huge loss in Q4 as shareholders weigh Air Canada takeover bid

MONTREAL — Transat AT Inc.’s shares fell by as much as 10 per cent in intraday trading on Monday, as the company reported disappointing earnings results for its latest quarter.

The Montreal-based tour operator capped an unprecedented year by losing $238.1 million attributable to shareholders in the fourth quarter, with revenues down a stunning 96 per cent from the year before.

“No company is built to operate at close to zero revenue for nine months,” said Jean-Marc Eustache, president and CEO of Transat, on a call with analysts Monday.

“The mere fact that we are still standing is attributable to how solid a balance sheet we had before the pandemic hit and how quickly we adjusted ourselves to protect our cash.”

The earnings call comes a day before Transat shareholders are scheduled to vote on a revised deal to be acquired by Air Canada. In August 2019, shareholders approved a previous offer from Air Canada, but the sale price was lowered in October to $5 from $18 per share.

On the call, Eustache reiterated his recommendation that shareholders approve the transaction, but said the company was taking steps to improve its cash position should the deal fail to close.

“We have said many times in the past that the alliance with Air Canada was the best way forward for Transat and all of the stakeholders, and that is even more true in the context of the pandemic,” Eustache said.

In a memo after the earnings were released, Desjardins analyst Benoit Poirier said Transat’s future was uncertain if the deal didn’t go through, adding that the company’s initiatives to preserve cash were weaker than expected.

Transat says it expects regulatory approval for its takeover by Air Canada on Feb. 15.

Transat’s earnings reflect the toll that the pandemic has taken on Canada’s airlines, which are currently lobbying Ottawa for industry-specific financial assistance. The federal government has said that any aid is contingent on airlines refunding passengers for flights cancelled due to the pandemic.

Various consumer groups have demanded that the airlines issue full refunds rather than travel vouchers, but the airlines have yet to budge.

Airlines have responded to the slowdown in demand by slashing routes. Last week, Air Canada said it would cancel some routes in Atlantic Canada and suspend others temporarily — a move that local airport operators said would be devastating for the region’s economy.

Eustache said Monday that the lack of assistance from Ottawa means that foreign competitors will be better positioned than domestic airlines to take advantage of a recovery in demand for air travel once the public health situation improves.

Transat said the quarterly loss amounted to $6.31 per diluted share, compared with a profit of 62 cents per share or $23 million in the fourth quarter of 2019.

The adjusted loss was $156.4 million or $4.14 per share, compared with an adjusted profit of $30.1 million or 80 cents per share in the prior year’s quarter.

Revenues for the three months ended Oct. 31 were $28.4 million, down $664.8 million from a year earlier on dramatically reduced service.

Transat’s adjusted loss was expected to be $2.35 per share on $138.4 million of revenues, according to data firm Refinitiv.

For the full year, Transat lost $496.5 million or $13.15 per share on $1.3 billion of revenues. That compared with a loss of $32.3 million or 86 cents per share in 2019 when revenues were $2.9 billion.

This report by The Canadian Press was first published Dec. 14, 2020.

Companies in this story: (TSX:TRZ, TSX:AC)

Jon Victor, The Canadian Press

Airlines

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Paul Harris, owner of Tribe restaurant downtown, said a lot of the blame for the latest restrictions that will close outdoor patios on Sunday can be blamed on those not obeying health regulations and the government for failing to enforce the rules.
Photo by Paul Cowley/Advocate staff
Restaurant owners frustrated by patio shutdowns

Outdoor patios must stop serving by midnight Sunday to stem rising COVID infections

As of Friday, Alberta has under 10,000 active COVID-19 cases. (Image courtesy CDC)
Alberta reports 2,271 new COVID-19 cases, Red Deer cases rise slightly

Across Alberta, there are 666 people in hospital with COVID-19, including 146 in the ICU

‘Love, Oran’ is a documentary feature made by Red Deer-raised filmmaker Colin Scheyen. It’s about hidden letters, found in a Woodlea home after 70 years, revealing a family secret. (Screenshot by Advocate staff).
Hidden letters reveal secrets of Red Deer family in a new documentary film

‘Love, Oran,’ by filmmaker Colin Scheyen is showing at Edmonton’s NorthwestFest

Red Deer Rebels' three graduating players, Josh Tarzwell (left), Chris Douglas (middle) and Ethan Anders (right) will all move on to new opportunities next season. (Photo by ROB WALLATOR/Red Deer Rebels)
‘It was a rollercoaster’: Rebels’ graduating players look back on wild season

The nerves. Even three and a half years later, Josh Tarzwell still… Continue reading

Red Deer Mayor Tara Veer addressed the city in a Facebook Live video Wednesday and asked citizens to continue to be diligent in the battle against COVID-19. (Photo by LANA MICHELIN/Advocate staff).
‘It’s affecting us all’: Veer encourages city to come together in response to COVID-19

Red Deer Mayor Tara Veer is gravely concerned about the growing COVID-19… Continue reading

Deputy Prime Minister and Minister of Finance Chrystia Freeland joins Prime Minister Justin Trudeau as they participate in a virtual discussion from Ottawa on Monday, May 3, 2021, with seniors from Residence Memphremagog in Magog, Quebec. THE CANADIAN PRESS/Sean Kilpatrick
Federal budget ‘overstates’ economic impact of stimulus spending, budget officer says

OTTAWA — Parliament’s spending watchdog says the federal Liberals’ budget overestimates how… Continue reading

A dose of the Pfizer COVID-19 vaccination is prepared at a mobile clinic for members of First Nations and their partners, in Montreal, Friday, April 30, 2021. THE CANADIAN PRESS/Ryan Remiorz
Health Canada maintains getting immunized ASAP with any vaccine offered is best

OTTAWA — Health Canada’s chief medical adviser says her advice has not… Continue reading

FILE - This Sunday, April 10, 2011 picture shows a rig and supply vessel in the Gulf of Mexico, off the cost of Louisiana. Thirteen states sued the Biden administration Wednesday, March 24, 2021 to end a suspension of new oil and gas leases on federal land and water and to reschedule canceled sales of offshore leases in the Gulf of Mexico, Alaska waters and western states. The Republican-leaning states, led by Louisiana Attorney General Jeff Landry, seek a court order ending the moratorium imposed after Democratic President Joe Biden signed executive orders on climate change on Jan. 27.     (AP Photo/Gerald Herbert)
Report finds climate change rarely part of Atlantic Canada’s fisheries management

ST. JOHN’S, N.L. — Climate change is rarely factored into management decisions… Continue reading

Pharmacist Barbara Violo shows off a vile of the Oxford-AstraZeneca COVID-19 vaccine after providing doses to customers at the Junction Chemist, which is a independent pharmacy, during the COVID-19 pandemic in Toronto on Friday, March 12, 2021. THE CANADIAN PRESS/Nathan Denette
New Brunswick reports blood clot death in connection with Oxford-AstraZeneca vaccine

FREDERICTON — New Brunswick health officials on Wednesday reported the province’s first… Continue reading

FILE PHOTO
Avoid mixed messaging with any mix-and-match vaccine plan: CEO

Public health doctors and immunologists in Canada are calling for a wait-and-see… Continue reading

Passengers from New Delhi wait in long lines for transportation to their quarantine hotels at Pearson Airport in Toronto on Friday April 23, 2021. Transport Minister Omar Alghabra says the resumption of international travel requires a coordinated approach for testing and a common platform for recognizing the vaccinated status of travellers. THE CANADIAN PRESS/Frank Gunn
Canada supports ‘common platform’ to recognize vaccine status of travellers: Alghabra

OTTAWA — Transport Minister Omar Alghabra says the resumption of international travel… Continue reading

Toronto FC midfielder Richie Laryea (22) and Vancouver Whitecaps midfielder Caio Alexandre (8) compete for the ball during the second half of an MLS soccer match, Saturday, April 24, 2021, in Orlando, Fla. Unable to dig itself out of a deep first-leg hole, Toronto FC exited the Scotiabank CONCACAF Champions League on Tuesday at the hands of Cruz Azul. THE CANADIAN/AP/Phelan M. Ebenhack
Toronto FC exits CONCACAF Champions League at the hands of Mexico’s Cruz Azul

Mexico to face either MLS champion Columbus Crew SC or Monterrey in the August semifinals

Most Read