Canada-based integrated tourism company Transat A.T. Inc. (TRZ_A.TO,TRZ_B.TO) on Thursday reported a net loss for the first quarter that narrowed from last year as lower operating costs helped offset a 9.7% decline in revenues due to lower selling prices and volumes. The latest quarter's results also reflect higher one-time gains compared to the year-ago period. Excluding items, loss for the quarter widened from the prior-year period.
Looking ahead, the company forecasts a loss for the second quarter as lower selling prices will more than offset lower fuel prices, hotel costs and air seat costs. The company also said it will not be able to fully benefit from the strength of the Canadian dollar due to its foreign exchange hedging positions.
Transat, which is also the parent company of charter airline Air Transat, reported a net loss for the first quarter of C$13.87 million or C$0.37 per share, compared to net loss of C$29.44 million or C$0.90 per share for the year-ago period.
The results for the latest quarter include a non-cash fuel hedging gain of C$0.9 million, a gain of C$10.4 million on foreign currency hedging instruments, and a gain of C$3.5 million from its investments in asset-backed commercial paper or ABCP.
The previous-year quarter's results include a fuel hedging loss of C$20.7 million, a loss of C$21.9 million on foreign currency hedging instruments and a gain of C$3.1 million from ABCP investments.
Prior to these non-cash and non-operating items, Transat's after-tax loss for the latest quarter was C$18.20 million or C$0.48 per share, compared to after-tax loss of C$11.80 million or C$0.36 per share in the previous-year quarter.
Revenues for the first quarter declined 9.7% to C$792.56 million from C$877.25 million in the year-ago quarter, reflecting a reduction in the number of travellers, lower selling prices and a stronger Canadian dollar.
Jean-Marc Eustache, president and chief executive officer of Transat said, "The decrease in revenues stems mainly from lower selling prices and volumes. Our operating costs decreased significantly, partially offsetting the unfavourable impact of lower prices on our margins, in a highly competitive commercial environment."
Operating loss for the first quarter widened to C$12.41 million from C$8.50 million in the prior-year quarter due to a reduction in commercial activity and lower selling prices.
Revenues for Transat's North American business units, which are generated by sales to customers in Canada and abroad, declined 11.2% during the first quarter. The decrease was due to a reduction in commercial activity, partially stemming from a decision to reduce capacity, in addition to an 8.6% decline in the number of travellers and lower selling prices.
North American business units recorded an operating loss of C$3.9 million, compared with a margin of C$1.3 million in the year-ago period. The decrease in margin is mainly due to lower selling prices, the result of overcapacity in the marketplace, and a highly competitive commercial environment.
Revenues for the company's European business units, which are generated by sales to customers in Europe and in Canada, declined 1.5% in the first quarter despite a 30.1% surge in the number of travellers.
The sharp growth in traveller volumes was driven by Canadian Affair's sales in the U.K. and Canada, partially offset by lower volumes in France. However, the increase in revenue from higher traveller volumes was not able to offset the effect of a strong Canadian dollar against the euro and the pound sterling, in addition to lower selling prices.
The European business units recorded an operating loss for the quarter that narrowed to C$8.5 million from $9.8 million in the same period last year. Looking ahead to the second quarter, Transat said it expects to record a loss.
Transat forecasts selling prices for the second quarter to be lower than the prior-year period, but the decrease is expected to be partially offset by lower fuel prices, hotel costs, other land portion expenses and air seat costs. The company also said it will not be able to fully benefit from the strength of the Canadian dollar due to its foreign exchange hedging positions.
The company projects reservations from Canada to sun destinations to be similar to the volumes of the previous year, while capacity is slightly higher. In France, reservations levels are expected to be similar to the year-ago period.
For the summer of 2010, Transat said it is too early to make a statement on pricing trends, but reservations are expected to be higher than the prior year.
On the Toronto stock exchange, TRZ_A.TO closed Wednesday's regular trading session at C$19.52. TRZ_B.TO ended the regular trade on Wednesday at C$19.50.
For comments and feedback contact: editorial@rttnews.com
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.