The COVID-19 pandemic has caused a drastic drop in air traffic which is reflected in the financial results of Quebec carrier Transat AT in the fourth quarter and for the year.
For the fiscal year ended October 31, revenue reached $ 1.3 billion, but COVID-19 has taken a hit since last March, causing losses of $ 496.5 million, or $ 13.15 per share , for Transat AT Last year, losses amounted to $ 32.3 million, or $ 0.86 per share.
According to figures released on Friday, Transat declared losses of $ 238.1 million, or $ 6.31 per share, in the 4th quarter compared to profits of $ 23 million, or $ 0.62 per share, for the corresponding period last year.
Revenue only reached $ 28.4 million in the fourth quarter, a far cry from 2019’s $ 664.8 million.
The buyout of Transat by Air Canada must be approved on December 15 at a meeting. The deal reached before COVID-19 arrived was overhauled in October, so Air Canada is now only offering $ 190 million of the $ 720 million it was initially supposed to extend. The offer is therefore $ 5 per share instead of the starting $ 18. If all the required approvals are obtained and the conditions are met, the closing of the sale of Transat to Air Canada is expected to be effective on February 15, 2021.
“During the year, we took all measures to reduce damage and preserve our cash flow,” said Jean-Marc Eustache, President and Chief Executive Officer of Transat, in a press release.
“The upcoming conclusion of the transaction with Air Canada would allow us to be solid to face the end of the crisis and take advantage of the recovery that the arrival of a vaccine cannot fail to provoke,” he continued. However, we have also put in place a short-term financing of $ 250 million, and are currently working to replace it in a scenario of non-completion of the transaction by a global financing covering our needs for the year 2021, which could be do, among other things, within the framework of a support plan for the industry, as announced by the government. ”