Despite travel rebound, soaring fuel prices dig into Transat earnings
Global News
The Montreal-based company says the recovery that was temporarily slowed down by the Omicron variant earlier this year is now firmly entrenched.
Skyrocketing jet fuel prices and COVID-19 measures ate into the profits of Transat A.T. Inc. in its second quarter, despite higher revenues as air travel began to rebound, sparking hopes of a turbocharged summer.
The tour operator saw its net loss attributable to shareholders swell 41 per cent for the quarter ended April 30, even as revenues were more than 47 times higher than a year earlier.
“`The cost of fuel rose sharply, without which we would have reported positive adjusted operating results in April,” chief executive Annick Guérard said in a statement Thursday.
She said consumers are ready to accept price hikes while the company has implemented a fuel hedging program to protect against significant increases during the summer.
The arrival of two new fuel-efficient Airbus A321neo jetliners this summer will also cut fuel costs.
North American jet fuel prices rose 124 per cent year over year to US$174 per barrel as of June 3, according to the International Air Transport Association. Spiking in March amid Russia’s invasion of Ukraine, the price has fallen 14 per cent over the past month.
Months earlier, the highly infectious Omicron strain prompted further border restrictions and another drop in travel bookings.
Transat cancelled nearly 30 per cent of its scheduled flights in January and February as a result.
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