Paris attacks have slowed travel bookings, but upswing expected: Transat AT CEO

MONTREAL -- Last month's terrorist attacks in Paris have caused a chill in travel from Canada to the French capital but the impact is expected to be temporary, tour operator Transat AT said Thursday.

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"It's normal but we don't see that (continuing)," Transat CEO Jean-Marc Eustache told analysts on a conference call.

Eustache referred to a much greater chill after the Sept. 11, 2001, terrorist attacks in the United States that caused the airline to ground 25 per cent of its aircraft, reduce staff and cut salaries.

"It was the worst that had ever happened in the world and (within six months) I was hiring everybody back," Eustache said.

Transat declined to provide details about the size of the sales decline since the Nov. 13 co-ordinated attacks in Paris that killed 130 and injured hundreds more.

But it said the decline in bookings has mostly affected flights before Christmas. Bookings for flights early in the new year and for the coming summer are running ahead of last year.

Before the Paris attacks, Transat (TSX:TRZ) posted a strong summer season, earning $69.1 million in the three months ended Oct. 31, up from $30.6 million a year ago.

Excluding the impact of fuel-hedging, restructuring and asset impairments, Transat earned $54.8 million or $1.44 per diluted share. That was up from $49.4 million or $1.27 per share a year earlier and above analyst estimates of $1.23.

Revenues decreased 0.6 per cent to $839.2 million, as lower fuel costs triggered a decline in average selling prices.

"Our summer results at a time when global capacity was up seven per cent on the transatlantic market are the second-best we ever recorded and are part of Top 5 summer results all achieved in the in last six years," chief financial officer Denis Petrin said.

For the full year ended Oct. 31, adjusted profits fell five per cent to $42.9 million or $1.11 per diluted share as revenues decreased about $200 million to $3.6 billion.

The company said it is hoping to improve its financial performance in the upcoming winter season, which runs until the end of April, after several years of losses, even as it expects operating costs to rise four per cent as the weaker Canadian dollar more than offsets the benefit from lower fuel costs.

Sales of packages to Transat's large market in Cuba are holding up even though Cuban hotels have tied their prices to the U.S. dollar, resulting in increases of up to 15 per cent for Canadians because of the loonie's depreciation.

Transat's top three markets -- Mexico, Dominican Republic and Cuba -- account for 90 per cent of its traffic over the winter.



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