Air Transat blames weak loonie and Zika virus for $61M loss in 1st quarter
Air Transat posted a loss of $61 million on revenues of $846 million in the first quarter, blaming Canada's weak currency and fears over the Zika virus as the drag on its finances.
The travel company said Thursday that the loonie's weakness against the U.S. dollar resulted in higher overall costs that weren't completely offset by lower fuel prices or higher average selling prices for its services.
The loss comes even as the Montreal-based airline saw more people buy tickets to fly on its planes.
The period, which includes the busy holiday flying season, saw the company post an increase of 8.7 per cent in the number of travellers — and higher average selling prices for Sun destinations, which the airline says is its core market segment.
"Our organization is significantly more efficient, but the effects of our initiatives have been masked by the drop in value of the Canadian dollar," CEO Jean-Marc Eustache said.
A focus on sun destinations was especially problematic for the airline as global fears over an outbreak of the Zika virus in South America and the Caribbean emerged during the period, and those are two of Transat's most popular service areas.
"The dollar, the Zika virus, the possibility of strike action by our pilots, which has now been averted, an economic slowdown and fairly mild weather conditions are all factors that make the current ... season challenging," Eustache said.