Air Transat has just disclosed a deficit of $ 8 million for the third quarter of 2018. Traditionally, the third quarter of the year is the one that produces the best financial results with Air Transat, so we must expect that the tour operator ends the year 2018 in deficit.
Air Transat explains that the price of fuel has increased by 11% compared to the same period in 2017 when the price of tickets has remained about the same. Air Transat’s management expects to be able to return profitability next year, as it plans a new network planning method and better management of the in-flight product offer in order to increase its profit margin. The arrival of new A321CEO and A321NEO aircraft in the Air Transat fleet from 2019 to 2022 should enable it to cope with future fuel increases.
The financial health of Transat A.T. is still excellent, as at July 31, the group had $ 867.2 million in cash, of which nearly 300 could be used to develop its own hotel network in sun destinations. In the coming years, hotel revenues will enable Air Transat to better compete with the airline sector as more and more discount carriers offer flights from Montreal and Toronto. Replacing the old fuel thirsty A310s with more modern, fuel-efficient A3321s is also expected to help Air Transat move through the next fuel increase cycle.
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