Transat reports net loss, blames sagging dollar

MONTREAL — Package tour company Transat cut 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 $ 22- million increase in operating expenses.

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,” CEO Jean- Marc Eustache said.

“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 .”

During the quarter, Transat reduced capacity on its sun- destination routes by 3.5 per cent, which contributed to a 5.3- percent overall decrease in the number of travellers. Average selling prices were up, and the euro and pound traded higher against the Canadian dollar.