We’re seeing very strong demand for international leisure travel: Transat’s CFO Patrick Bui
Transat is adjusting its outlook for the fiscal year in light of strong demand for leisure travel, the company said Thursday as it reported second-quarter earnings.
Based on booking trends, the Montreal-based air carrier said it is adjusting its operating income margin for 2023 to a target of 5.5 per cent to seven per cent, up from the previous range of four per cent to six per cent.
Transat CFO Patrick Bui said “very strong” demand for leisure travel is driving up prices, and the company has already sold 60 per cent of its summer capacity.
“Underlying the increase in prices is an increase in demand,” he told BNN Bloomberg Thursday. “People want to travel, especially leisure travel, international leisure travel and that is what Transat is all about.”
“We’re happy to see that consumers are back and want to travel and ready to review their priorities in terms of spending and paying higher prices for the appropriate travel.”
Transat said its operating income was $56.1 million, nearly 40 per cent higher than in Q2 of 2023 compared with the second quarter of 2019.
It also reported higher revenues and smaller losses compared with the previous year.
Net losses was $29.2 million compared with $98.3 million in the second quarter of 2022, when the spread of the contagious COVID-19 Omicron variant led to cancelled flights, the company said.
Still, the company is dealing with debt brought on by the drop in travel during the pandemic.
“We’re laying down the foundations of repaying this debt,” said Bui. “First step is actually to have a better financial performance to support higher levels of debt and secondly is making sure we generate sufficient cash flows in order to repay this debt.”
Revenues amounted to $870.1 million, up from $358.2 million in the same time frame last year.
Transat said it expects the “solid” performance to continue through the year.
“The combination of strong demand and upward pricing will allow the Corporation to cope with a cost environment that remains generally higher and volatile,” the company said in a news release.
With files from Ben Cousins