Transat AT’s Q3 net profit drops 28% in unsettled summer travel market

MONTREAL – Transat A.T. Inc. (TSX:TRZ) says it’s feeling the impact of an unsettled transatlantic travel market this summer, with net income down 28.2 per cent and adjusted earnings down almost 91 per cent from the same time last year.

The Montreal-based company’s net income dropped to $9.4 million or 26 cents per share, from $13.1 million or 34 cents per share in last year’s third quarter.

Nearly one-quarter of the third quarter’s net income — $2.5 million — was attributed to Transat’s 35 per cent interest in Ocean Hotels.

Transat says the strength of the U.S. dollar helped increased Ocean Hotel’s contribution from $1.6 million last year.

Adjusted profit was $2.5 million or seven cents per share, down from $26.9 million or 70 cents per share and revenue was $663.6 million, down six per cent from $704.8 million a year ago.

Transat’s president and CEO, Jean-Marc Eustache, says this year’s third quarter ended July 31 was marked by rapid changes in demand because of terrorism-related fears and a dramatic increase in the travel industry’s transatlantic capacity.

Eustache says the company is relatively satisfied with its results given the circumstances, but says there’s no hope of a repeat of the “outstanding” performance achieved in the previous two summer seasons.