Transat AT Inc., the vacation operator that Air Canada tried to buy, will discontinue its nascent hotel division and increase its presence in Eastern Canada in an effort to restart its business and return to profit.

The Montreal-based company will gradually resume operations starting July 30, it said in a statement on Thursday. As part of its new strategy, it plans to seek partnerships with other carriers to expand its network, renegotiate some aircraft leases and real-estate contracts, and narrow its fleet to only two Airbus SE plane models.

Transat shares roses as much as 4.9 per cent to their highest level since March 16 before paring those gains. They were trading at $5.85 of of 12:06 p.m. in Toronto, up 16.5 per cent this week.

Transat sells vacation packages and flights to Canadians visiting sun-spot destinations in winter and European cities in summer. Airline operations have been suspended in Canada since Jan. 29 because of COVID-19 restrictions. As a result, revenue at Transat has all but vanished, dropping 99 per cent from a year earlier in the quarter that ended April 30.

In April, Transat obtained $700 million (US$579 million) in emergency aid from the Canadian government.

“The financing we secured will allow us to roll out our plan over the coming years,” Chief Executive Officer Annick Guerard, who took over from Jean-Marc Eustache last month. Guerard pledged to make the company “more profitable than before the pandemic.”

The company has also been hit hard by stringent Canadian entry and quarantine rules and Prime Minister Justin Trudeau’s request to halt travel to Mexico and the Caribbean to slow the spread of new virus variants. Now the government is starting to loosen restrictions for fully vaccinated Canadian residents.

Transat’s entry into the hotel business was new, begun in 2018 with the purchase of two oceanfront lots in Puerto Morelos, Mexico.

Transat said it continues to hold talks with Pierre Karl Peladeau, the Quebec media and cable executive, about a possible takeover. He made a non-binding offer for $5 a share on April 7, it said.