March 13 Canadian tour operator Transat AT Inc
said it expected "inferior" results in the current
quarter, after a bigger first-quarter loss due to a weak
Canadian dollar that pushed up operating expenses.
Low inflation and a possibility of an interest rate cut
dragged down the Canadian dollar to a four-and-a-half year low
against U.S. dollar on Jan. 31.
"(The weak dollar) resulted in a significant increase in our
operating expenses, which was offset only partially by higher
selling prices and by our hedging program," Chief Executive
Jean-Marc Eustache said in a statement.
The company, which also owns holiday travel airline Air
Transat, makes major purchases such as planes and fuel in U.S.
Transat said its first-quarter operating expenses rose 2.7
percent from a year earlier.
The company said Air Transat's load factor was expected to
fall about 2 percent in its "sun destinations" market and about
5 percent in its Transatlantic market in the quarter ending
The Montreal-based company offers discounted air fares and
vacation packages, competing mainly with WestJet Airlines'
WestJet Vacations and Air Canada's Air Canada
Air Canada warned in February that adverse weather
conditions and weakness in the Canadian dollar were likely to
hurt its current-quarter earnings and revenue. The company had
also said it was looking to trim costs and raise prices at an
Transat's net loss in the first quarter ended Jan. 31
widened to C$25.6 million ($23.0 million), or 67 Canadian cents
per share, from C$15.1 million, or 39 Canadian cents per share,
a year earlier.
Total revenue rose 5 percent to C$847.2 million. Revenue
from its North American business units increased 4.6 percent,
while revenue from its European business units rose 8.7 percent.