June 12, 2014 - 5:28 AM
MONTREAL - Package tour comany Transat A.T. Inc. (TSX:TRZ.A) reduced its net loss to $7.9 million for the second quarter from $22.8 million in the year-ago period as revenues rose one per cent to $1.1 billion.
The parent company of airline Transat said Thursday the results for the quarter and the winter are slightly better than it expected, despite a sudden drop in value of the Canadian dollar that led to a significant increase in operating expenses.
Those were up by $22 million.
The loss amounted to 20 cents per share for the quarter ended April 30, compared with 59 cents per share in the same quarter last year.
Transat says its adjusted operating loss came to $4 million, compared with an adjusted operating profit of $2.7 million in 2013, and was attributable "entirely" to the decline in value of the Canadian dollar against the U.S. dollar.
"It was a peculiar winter," chief executive Jean-Marc Eustache said in a news release.
"In December, margins were higher year-over-year and we were heading toward a performance improvement. The sudden drop in value of the Canadian dollar provoked a significant increase in operating expenses that reversed the situation, as it came early in the season, when the market resists increases in selling prices."
During the quarter, Transat reduced capacity on its sun-destination routes by 3.5 per cent, which contributed to a 5.3 per cent overall decrease in the number of travellers.
Average selling prices were up, and the euro and pound traded higher against the Canadian dollar.
Transat says the combined effect of increased selling prices and cost controls weren't enough to offset the effect of those increased expenses.
News from © The Canadian Press, 2014