Canadian airline Transat A.T. Inc. (TSX:TRZ) is pleading for government aid after its revenue fell 98.6% due to the COVID-19 pandemic.
Transat A.T. reported a net loss attributable to shareholders of $45.1 million or $1.20 per share for its third quarter compared with a loss of $1.5 million or four cents per share a year earlier. Revenue in the latest quarter totaled $9.5 million, down 98.6% from a year ago.
On an adjusted basis, Transat said it lost $3.70 per share for the quarter compared with an adjusted profit of 16 cents per share in the same quarter last year. The travel company said the quarter ended July 31 included one week of operations as it resumed flying on July 23 after shutting down April 1 due to the global pandemic.
Transat is currently flying to 11 European destinations in France, the United Kingdom and Portugal as well as to Mexico, the Dominican Republic and Haiti. It is also running a domestic program linking Montreal, Toronto, Calgary and Vancouver.
The results prompted Transat President Jean-Marc Eustache to call on the federal government in Ottawa for support as it continues to be held back by pandemic-related travel restrictions. Transat also warned that it may have to lay off 2,000 employees, or 40% of its workforce.
Transat bled about $1.7 million in cash per day in the quarter ended July 31, but still had $576.4 million in cash and cash equivalents as of that date. Class action lawsuits and reimbursement rules add another financial drain on the carrier’s coffers after Transat, like other Canadian airlines, issued flight credits rather than refunds for trips cancelled due to the COVID-19 pandemic.
Canada, unlike France, Germany and the United States, has refrained from sector-specific aid for airlines. Instead Prime Minister Justin Trudeau has rolled out financial aid available across industries, including wage subsidy and loans starting at $60 million for large companies.