MONTREAL — The head of Transat A.T. Inc. says Canadians' appetite for travel remains unsated — at least for overseas trips — even as pocketbook worries grow amid a trade war with the United States.
Travellers continue to book transatlantic flights with the tour company, said CEO Annick Guérard, though she acknowledged demand for American destinations has dropped sharply over the past few months.
"Besides the U.S. market ... we have not seen — yet — other negative impacts on our booking curve following tariff announcements," Guérard told analysts on a conference call Thursday.
"We are well aware that the current environment is affecting overall consumer confidence, and this could eventually affect travel demand. But we haven't seen any impact over the last weeks."
Transat currently flies to only two U.S. destinations, in Florida. The company opted to cut capacity to the state by about 10 per cent last month, according to figures from aviation data tracker Cirium, as bookings declined amid the backlash to tariff threats levelled by U.S. President Donald Trump as well as a weak loonie.
The mood of uncertainty hanging over the North American economy could result in more last-minute bookings as customers consider whether to spend their weaker Canadian currency on travel.
"People potentially will hesitate before making any bookings," Guérard said, pointing to the "unstable economic environment."
"Things are looking good, for now" — with ticket purchases, at least.
Aircraft are another story. Air Transat remained down six to seven planes — 14 to 16 per cent of its 44-plane fleet — depending on the week. The airline is one of many hit by a recall of turbofans from aircraft engine giant Pratt & Whitney that has diminished fleets across the globe.
"We continue to actively manage the severe negative impact caused by Pratt & Whitney GTF engine issues," said Guérard, adding that she expected the groundings to persist through the year.
In some ways, Transat remains better placed than airlines with bigger exposure to the U.S. market.
Carriers and travel companies across the continent have seen bookings to the United States plummet as mounting economic uncertainty prompts a pullback in spending by consumers and businesses. Canadians are also rethinking their plans amid anger over the trade war set as well as the low loonie.
Air Canada announced last month it would scale back flights to Florida, Las Vegas and Arizona starting in March — usually go-to hot spots during spring break season. And WestJet said in an email there has been a shift in bookings from the U.S. to other sun destinations such as Mexico and the Caribbean.
The three biggest U.S. carriers — American Airlines, Delta Air Lines and United Airlines — have all cut earnings forecasts for the year, with the latter two reducing capacity as well.
On Thursday, the company reported a net loss of $122.5 million in its first quarter, double the $61 million in losses from the same period the year before. However, its adjusted net loss of $75 million marked a mild improvement from a $76-million loss a year earlier. Unfavourable foreign exchange rates help explain the worse performance on net losses, the company said.
On an adjusted basis, Transat said it lost $1.90 per share in the quarter ended Jan. 31, compared with an adjusted loss of $1.97 per share in the same three months last year.
Revenue for the quarter rose nearly six per cent year-over-year to $829.5 million from $785.5 million.
The increase came as traffic expressed in revenue passenger miles — a metric tallying the number of miles travelled by paying customers — rose one per cent year-over-year.
This report by The Canadian Press was first published March 13, 2025.
Companies in this story: (TSX:TRZ)
Christopher Reynolds, The Canadian Press
