MONTREAL, May 10, 2024
/CNW/ - Transat A.T. Inc. ("Transat" or the
"Corporation") announced today that it will likely not
achieve its adjusted EBITDA margin1 forecast for
fiscal 2024.
Persistent operational challenges related to Pratt &
Whitney's GTF1 engines, market dynamics leading to
downward pressure on airline unit revenues (yield), and the
consequences of union strike threats, have created a particularly
volatile environment. Although the situation may evolve in upcoming
months, the current trend places the Corporation on a trajectory to
achieve an adjusted EBITDA margin1 of approximately
5% for fiscal 2024.
Given these factors, the Corporation has deemed it prudent to no
longer issue guidance on this metric in the future.
The Corporation will provide further information about its
performance and strategies during the second quarter earnings call
on June 6th.
Caution regarding forward-looking
statements
This news release contains certain forward-looking statements
with respect to the Corporation, including those regarding its
results, its financial position and its outlook for the future.
These forward-looking statements are identified by the use of terms
and phrases such as "anticipate" "believe" "could" "estimate"
"expect" "intend" "may" "plan" "potential" "predict" "project"
"will" "would", the negative of these terms and similar
terminology, including references to assumptions. All such
statements are made pursuant to applicable Canadian securities
legislation. Such statements may involve but are not limited to
comments with respect to strategies, expectations, planned
operations or future actions. Forward-looking statements, by their
nature, involve risks and uncertainties that could cause actual
results to differ materially from those contemplated by these
forward-looking statements.
The forward-looking statements may differ materially from
actual results for a number of reasons, including without
limitation, economic conditions, changes in demand due to the
seasonal nature of the business, extreme weather conditions,
climatic or geological disasters, war, political instability, real
or perceived terrorism, outbreaks of epidemics or disease and the
lingering effects of the COVID-19 pandemic, consumer preferences
and consumer habits, consumers' perceptions of the safety of
destination services and aviation safety, demographic trends,
disruptions to the air traffic control system, the cost of
protective, safety and environmental measures, competition,
maintain and grow its reputation and brand, the availability of
funding in the future, the Corporation's ability to adequately
mitigate the Pratt & Whitney GTF engine issues, fluctuations in
fuel prices and exchange rates and interest rates, the
Corporation's dependence on key suppliers, the availability and
fluctuation of costs related to our aircraft, information
technology and telecommunications, cybersecurity risks, changes in
legislation, unfavourable regulatory developments or procedures,
pending litigation and third-party lawsuits, the ability to reduce
operating costs, the Corporation's ability to attract and retain
skilled resources, labour relations, collective bargaining and
labour disputes, pension issues, maintaining insurance coverage at
favourable levels and conditions and at an acceptable cost, and
other risks detailed in the Risks and Uncertainties section of the
MD&A included in our 2023 Annual Report.
The reader is cautioned that the foregoing list of factors is
not exhaustive of the factors that may affect any of the
Corporation's forward-looking statements. The reader is also
cautioned to consider these and other factors carefully and not to
place undue reliance on forward-looking statements.
The forward-looking statements in this news release are based
on a number of assumptions relating to economic and market
conditions as well as the Corporation's operations, financial
position and transactions. Examples of such forward-looking
statements include, but are not limited to, statements
concerning:
- The outlook whereby the Corporation will be able to meet its
obligations with cash on hand, cash flows from operations and
drawdowns under existing credit facilities.
- The outlook whereby the Corporation does not anticipate
reaching the announced adjusted EBITDA margin1 for the
fiscal year 2024.
- The outlook whereby the current trend places the Corporation on
a trajectory to achieve an adjusted EBITDA margin1 of
approximately 5% for fiscal 2024.
In making these statements, the Corporation assumes, among
other things, that the standards and measures for the health and
safety of personnel and travellers imposed by government and
airport authorities will be consistent with those currently in
effect, that workers will continue to be available to the
Corporation, its suppliers and the companies providing passenger
services at the airports, that credit facilities and other terms of
credit extended by its business partners will continue to be made
available as in the past, that management will continue to manage
changes in cash flows to fund working capital requirements for the
full fiscal year and that fuel prices, exchange rates, selling
prices and hotel and other costs remain stable, and the Corporation
will be able to adequately mitigate the Pratt & Whitney GTF
engine issues. If these assumptions prove incorrect, actual results
and developments may differ materially from those contemplated by
the forward-looking statements contained in this press
release.
The Corporation considers that the assumptions on which these
forward-looking statements are based are reasonable.
These statements reflect current expectations regarding
future events and operating performance, speak only as of the date
this news release is issued, and represent the Corporation's
expectations as of that date. For additional information with
respect to these and other factors, see the MD&A for the
quarter ended January 31, 2024 filed
with the Canadian securities commissions and available on SEDAR
at www.sedarplus.ca. The Corporation disclaims any
intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, other than as required by applicable securities
legislation.
(1) Non-IFRS financial measures
Transat prepares its financial statements in accordance with
International Financial Reporting Standards ["IFRS"]. We will
occasionally refer to non-IFRS financial measures in the news
release. These non-IFRS financial measures do not have any meaning
prescribed by IFRS and are therefore unlikely to be comparable to
similar measures presented by other issuers. They are intended to
provide additional information and should not be considered as a
substitute for measures of performance prepared in accordance with
IFRS. All dollar figures are in Canadian dollars unless otherwise
indicated.
The following are non-IFRS financial measures used by management
as indicators to evaluate ongoing and recurring operational
performance.
Adjusted operating income (loss) or adjusted EBITDA:
Operating income (loss) before depreciation, amortization and asset
impairment expense, reversal of impairment of the investment in a
joint venture, restructuring and transaction costs and other
significant unusual items, and including premiums related to
derivatives that matured during the period. The Corporation uses
this measure to assess the operational performance of its
activities before the aforementioned items to ensure better
comparability of financial results.
About Transat
Founded in Montreal 36 years
ago, Transat has achieved worldwide recognition as a provider of
leisure travel particularly as an airline under the Air Transat
brand. Voted World's Best Leisure Airline by passengers at the 2023
Skytrax World Airline Awards, it flies to international
destinations. By renewing its fleet with the most energy-efficient
aircraft in their category, it is committed to a healthier
environment, knowing that this is essential to its operations and
the destinations it serves. Transat has been Travelife-certified
since 2018. (TSX: TRZ) www.transat.com
Source:
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Transat A.T. Inc.
(www.transat.com)
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Relations avec les
médias:
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Andréan
Gagné
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Directrice principale,
affaires publiques et communications
andrean.gagne@transat.com
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514 987-1616, poste
104071
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Analystes
financiers:
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Jean-François
Pruneau
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Chef de la direction
financière
jean-francois.pruneau@transat.com
514 987-1616, poste
4567
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1 Geared
turbofan ("GTF").
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SOURCE Transat A.T. Inc.