Union and engine woes push Transat to a loss as travel company curtails expansion

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MONTREAL — Transat A.T. Inc. felt the headwinds of stiff competition, engine recalls and the threat of a union strike last quarter, which together conspired to drain more money from the struggling tour operator.

Transat nearly doubled its losses to $54.4 million in the three months ended April 30 compared with the same period a year earlier. More cash departed its coffers despite a 12 per cent year-over-year boost in revenue, fuelled by an increase in passengers.

The airline's 2,100 flight attendants voted 99 per cent in favour of a strike mandate in November and twice rejected tentative deals before approving a new collective agreement in late February. The cost of temporary plane leases prompted by those engine issues put further pressure on profit margins, the company said.

Transat also launched on Wednesday the first phase of its joint venture with Porter Airlines that Guérard hopes will yield benefits via access to its partner's rapidly growing network in Canada and the United States.

 

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