Transat AT posts Q1 loss despite higher revenue as weak loonie pushes up costs

MONTREAL – Transat AT posted a loss in the latest quarter, including the Christmas holiday period, despite higher revenue because the weak Canadian dollar hurt its results.

The travel company said the loonie’s weakness from the U.S. dollar led to higher immediate and ongoing expenses that weren’t completely offset by lower fuel prices or more average prices for its services.

The loss for the first quarter of their financial year was $61.2 million, or $1.64 per share, Transat said. That in contrast to a loss of revenue of $64.3 million or $1.66 per share in the year ago quarter.

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The company said the advance to its bottom line was due to non-operating items for example fuel and currency hedging.

Otherwise, the Montreal-based company’s adjusted loss might have increased to $37.3 million or $1 per share from $32.4 million or 84 cents per share a year ago, despite a seven percent rise in revenue.

Revenue rose to $846.9 million in the quarter ended Jan. 31, from $788.6 million last year.

“During the first quarter, the web increase in the cost of packaging all-inclusive Sun destinations vacations was $24 million, and was just partly absorbed by consumers,” Transat president and CEO Jean-Marc Eustache said in a statement.

“The dollar, the Zika virus, the possibility of strike action by our pilots, that has now been averted, a fiscal slowdown and fairly mild conditions are all factors that make the present winter months challenging.”