MONTREAL — Transat A.T. Inc. reported a big boost in profits in its latest quarter, driven by millions of dollars in compensation from an engine maker as well as an uptick in passenger figures.
Net income surged to $41.2 million in the three months ended Oct. 31 versus $3.2 million in the same period a year earlier, the travel company said.
About $33.6 million of those earnings came from aircraft engine giant Pratt & Whitney, which dolled out the compensation after recalling its turbofans for inspection and repair. Air Transat, one of many airlines hit by the recall, had grounded a half-dozen planes by this fall as a result.
The profit increase also owes to a nearly three per cent rise in passenger traffic, Transat said in a release Thursday.
Chief executive Annick Guérard maintained a cautiously optimistic outlook for the year ahead.
"The decline in inflation and interest rates also suggests an increase in consumers' discretionary spending. This situation should provide a suitable backdrop to deliver further yield improvements," she said.
"However, we remain in a period of high economic uncertainty, leading us to exercise caution."
The company offered no update on efforts to refinance its balance sheet. Net debt at the end of the quarter stood at more than $2 billion.
On an adjusted basis, Transat reported earnings of 67 cents per share for its fourth quarter compared with an adjusted profit of 41 cents per share a year earlier. The results far exceeded analysts' expectations, according to financial markets firm LSEG Data & Analytics, largely because of the compensation from Pratt & Whitney.
Revenue for the quarter totalled $788.8 million, up three per cent from $764.5 million a year ago.
Transat's capacity rose four per cent compared with the year before.
This report by The Canadian Press was first published Dec. 12, 2024.
Companies in this story: (TSX:TRZ)
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