Transat secures $250M in new federal aid as fuel costs slam bottom line
The Montreal-based carrier said fuel costs jumped 56% and revenue rose 3% as competition limited its ability to raise fares.
- Montreal-based Transat A.T. Inc. reported a $106.6 million loss for its third quarter while securing an additional $250 million in emergency financing from the federal government to address soaring fuel costs.
- Fuel prices have doubled since late February after the U.S. and Israel began bombing Iran, prompting Iran to largely close the Strait of Hormuz, a critical waterway for aviation fuel.
- Revenue rose 3 per cent to $792.7 million during the quarter. CEO Annick Guérard stated, "Our third-quarter results were significantly impacted by sustained higher fuel prices," which remained the primary profitability driver.
- National Bank analyst Cameron Doerksen noted the new government funding alleviates short-term liquidity concerns, though he expressed surprise Transat failed to pass higher costs to customers like Air Canada.
- Total credit agreements with the federal government now reach $483.7 million. Doerksen warned the carrier will continue incurring losses unless fuel prices fall significantly or it can materially increase fares.
21 Articles
21 Articles
Ottawa is once again helping Transat AT with an additional $250 million to keep him in the water.
Transat secures $250M in new federal aid as fuel costs slam bottom line
Transat A.T. Inc. has secured an additional $250 million in emergency financing from the federal government after high fuel costs drove it further into the red last quarter. The new low-interest line of credit from the Canada Enterprise Emergency Fund comes on top of the $150-million loan the travel...
Transat announced that it had received an additional $250 million in emergency funding from Ottawa to meet rising fuel prices.
Le Journal de Montreal
Le Journal de QuebecStrongly affected by higher fuel prices, Transat AT realized a net loss of $106.6 million in the third quarter.
The federal government is once again stepping up to the rescue of Transat A.T. by making $250 million available to the leisure travel specialist, whose finances are hampered by soaring aircraft fuel prices.
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