Air Lease Corporation (ALC) has announced long-term lease placements for four new Airbus A321XLR aircraft with Air Transat (Canada).

Three new aircraft are confirmed to deliver to the airline starting at the end of 2025 through 2026 from ALC’s order book with Airbus.

The agreement also includes an option for one additional A321XLR aircraft to be delivered in 2027.

On the financial side, Transat A.T. Inc. issued this report for the third quarter:

For the third quarter:

• Revenues of $508.3 million
• Adjusted operating loss¹ of $57.8 million (operating loss of $93.2 million)
• Adjusted net loss¹ of $120.9 million (net loss of $106.5 million)

Financial position:

• Unrestricted liquity¹ of $511.3 million as at July 31
• The Corporation obtained an additional amount of $100.0 million under LEEFF
• Customer deposits of $585.6 million, representing 96% of pre-pandemic levels and a 19% increase over last quarter, reflecting the recovery in demand

Continuation of the strategic plan:

• The Corporation took delivery of two A321LR
• Signing of an agreement to deliver four A321XLR aircraft (three firm orders and one option)

Transat A.T. inc., a holiday travel reference worldwide, particularly as an air carrier under the Air Transat brand, announces its results for the third quarter ended July 31, 2022.

“The recovery emerging at the end of the last quarter has been confirmed in recent months. With our prudent planning and our teams’ exceptionally high quality execution, we were able to deploy virtually all of our programs, with continuously improving load factors,” stated Annick Guérard, President and Chief Executive Officer of Transat.

“We are on track for a winter season that promises to match pre-pandemic levels. The pace of sales is currently very comparable to 2019. Although the quarterly results are still affected by the costs of resuming operations, July was our first profitable month in more than two years, setting the stage for improved results. The strong pricing this quarter also partially absorbed the increase in fuel costs, the adverse effect of which is likely to persist for some time.”

“Our current cash position, combined with new financing obtained during the quarter, gives us the required flexibility for the future. We also continued to implement our strategic plan during the quarter, particularly with respect to the fleet, with the receipt of two new A321LRs and the order of four A321XLRs. These new aircraft will bring us all the advantages of the LR, including cost and environmental benefits, with an even longer range”, concluded Ms. Guérard.

Compared with 2021 (a quarter with virtually no operations), the Corporation’s revenues increased by $495.8 million for the quarter ended July 31, 2022. Compared with 2019, quarterly revenues were down  $190.6 million or 27%. Capacity offered was 82% of that deployed in 2019 across all programs and 68% for Europe, the main program during this period. Overall, the number of travellers was down 24% for the third quarter compared with 2019. The gradual recovery of demand combined with higher fuel prices also contributed to the increase in average selling prices compared with 2019. The increase in average selling prices is approximately 8% for the Europe program and 26% for the sun destinations program.

Operations resulted in an operating loss of $93.2 million, an improvement of $5.2 million compared with the $98.4 million loss in 2021. The improvement was reined in by a 112% surge in fuel prices (or $103.3 million) during the quarter, compared with 2021. Transat reported an adjusted operating loss¹ of $57.8 million, a deterioration of $6.9 million, compared with $50.9 million in 2021.

Net loss attributable to shareholders amounted to $106.5 million (or $2.82 per diluted share) compared with $138.1 million (or $3.66 per diluted share) for the corresponding quarter of last year. The net loss attributable to shareholders in 2022 was reduced by a $14.5 million gain on the revaluation of the liability related to warrants, partially offset by the $6.9 million loss related to the change in the fair value of fuel-related derivatives and other derivatives. The net loss attributable to shareholders in 2021 was increased by the $15.9 million foreign exchange loss, primarily attributable to the exchange effect on lease liabilities related to aircraft and the $9.4 million loss on the revaluation of the liability related to warrants. Excluding non-operating items, Transat reported an adjusted net loss¹ of $120.9 million ($3.20 per diluted share) for the third quarter of 2022, compared with $115.6 million ($3.06 per diluted share) in 2021.

As at July 31, 2022, cash and cash equivalents amounted to $411.3 million, compared with $429.4 million as at the same date in 2021. In total, the available financing amounted to a maximum of $963.3 million, of which $863.2 million was drawn down, for unrestricted liquidity¹ of $511.3 million.

Customer deposits for future travel stood at $585.6 million, representing 96% of pre-pandemic levels (as at July 31, 2019) and up 19% from the last quarter, reflecting the recovery in demand.

The Corporation took delivery of two A321LRs during the quarter and is expecting five more aircraft of this type in 2023 and 2024. In recent days, Transat also finalized its first order since 2018, for four A321XLRs, including three firm orders for delivery in 2025-2026 and an option for 2027. These aircraft have an even longer range than the A321LR and will eventually allow the Corporation to complete its fleet and serve more faraway destinations with an aircraft that has the same advantages as the LR, namely cost per passenger, reduced carbon footprint and exceptional on-board experience.

On August 23, 2022, the Corporation and the Canada Revenue Agency (“CRA”) came to an agreement concerning the tax treatment of ABCP-related tax losses. Under this agreement, the Corporation is expected to receive $11.8 million, of which $9.5 million had already been recognized. In addition, the Corporation could receive accrued interest in connection with this settlement agreement. The Corporation could also receive $6.0 million from provincial tax authorities, of which $4.9 million had already been recognized.

Fourth quarter 2022 – The current situation is showing very encouraging signs in terms of bookings as the last-minute booking trend persists. After the low reached during the Omicron wave, load factors have largely improved in recent months. Selling prices of bookings for the summer season have been steadily increasing since the start of spring across all our programs.

Across all our markets, the planned capacity for summer 2022 represents 92% of the 2019 capacity. For the transatlantic program, the Corporation’s main market for the summer season, the planned capacity in 2022 is 81% of the 2019 level. In the sun destinations program, the Corporation’s planned capacity is slightly higher than in 2019. Lastly, the Corporation tripled its capacity in the transborder market and deployed a slightly higher capacity for its domestic program, compared with 2019.

Fuel prices, if they remain at the current level, are creating strong pressure on the Corporation’s operating costs and profitability.

It remains difficult at this time to forecast the evolution of the health and economic situations or their impact on bookings and future financial results with sufficient precision for the Corporation to present a more comprehensive outlook for the fourth quarter of 2022.

Winter 2023 – In the sun destinations program, the Corporation’s main program for the period, Transat’s capacity is the same as that deployed in 2019 and 75% higher compared with 2022. To date, and overall, the load factors are comparable to 2019 levels while prices are higher.

The Corporation believes it is still too early to draw any conclusions regarding winter season results.

Air Transat aircraft photo gallery:

Air Transit has announced it will add Las Vegas to its roster of destinations available from Montreal this winter.

Starting November 3, Air Transat will fly nonstop to more than 50 destinations across the Caribbean, Mexico, Central and South America, the United States and Europe this winter.

Las Vegas: for business and pleasure

As of November 3, 2022, Air Transat will fly from Montreal to Las Vegas four times a week. This destination, renowned for its lively nightlife, large-scale concerts, and spectacular nearby national parks, also offers a multitude of business opportunities with its many trade shows and events.

A long-awaited return of key destinations

Travellers looking for discovery and a change of scenery will appreciate the return of three sunny routes that were put on hold due to the pandemic – two in the U.S. and one in Cuba. The carrier is markedly consolidating its presence in the Florida and Cuban markets, both of which continue to remain popular destinations among Canadian travelers.

Therefore, Air Transat will fly from Montreal to New Orleans two times a week starting November 3, to Havana three times a week starting December 19, and to Tampa two times a week starting December 23.

Three enhanced routes from Montreal

To meet the growing interest of travellers for these destinations, Air Transat will upgrade its Montreal–London and Montreal–Los Angeles seasonal service to a year-round service starting in the fall of 2022, each with three weekly flights. In addition, the carrier will extend its Montreal–Marseille direct flights to until January 8, 2023, with two flights a week.

Air Transit aircraft photo gallery:

Air Transat made this announcement:

Air Transat proudly announces its partnership with 4Ukraine.ca to help relocate Ukrainians displaced by war coming to Canada. Air Transat will be providing available seats to Ukrainian nationals on their flights operated from Paris and Londonmainly to Montréal or Toronto. 4Ukraine.ca will be covering taxes and airport charges. In addition to operating a donation-based airfare program, 4Ukraine.ca includes a rigorous vetting process, host family background checks, and job prospecting for Ukrainians relocating to Canada.

Air Transat, who has already successfully helped several families fly to Canada, is eager to continue supporting humanitarian efforts in Ukraine. “It was important for us to support the relocation of Ukrainians with an organization that facilitates every step of the relocation process, with a focus on ensuring the safety of this vulnerable population that has already faced significant trauma,” said Transat President and Chief Executive Officer Annick Guérard.

This partnership complements the fundraising campaign launched by Transat in March amongst its employees and customers to assist SOS Children’s Villages, a long-time charitable partner that has rapidly scaled up its response in Ukraine to meet the critical needs of vulnerable children and families affected by the conflict. “By adding our partnership with 4Ukraine.ca to our support to SOS Children’s Villages, we are able to lend help to Ukrainians internally displaced in Ukraine, as well as those who have fled the country and wish to relocate to Canada.” Added Guérard.

To date, 4Ukraine.ca has raised over $65,000 in donations and secured a partnership with FlightHub for $100,000 worth of flights. To support families and make this offer available to more qualifying Ukrainians, Canadians can donate directly on the 4Ukraine.ca website. Employers looking to hire Ukrainians and individuals wishing to host Ukrainians can find information at 4Ukraine.ca.

Air Transat aircraft photo gallery:

Air Transat has announce the gradual resumption of its operations to France’s regions, starting today with the departure of its first direct flight from Montreal to Marseille. From Brittany to Provence, Aquitaine and Auvergne, six destinations will be available once more to Quebec travellers in the coming weeks. Finally, in addition to gradually increasing flight frequency between Montreal and the City of Light, the airline will soon be relaunching its service to Paris from Toronto and Quebec City.

From Montreal, Air Transat will gradually start flying back to Bordeaux, Lyon, Marseille, Nantes, Nice and Toulouse by early May. This enhanced flight program to the regions of France is, of course, in addition to the usual daily Paris service from Montreal, which will reach up to 14 flights per week in May.

The company will also resume its direct service to Paris from Toronto on May 3 and from Quebec City on April 10.

At the height of the summer season, a total of 43 weekly flights to France will be operated from Montreal, Quebec City and Toronto.

Air Transat has announced today the relaunch of a significant number of its routes for the summer season. In particular, the company is consolidating its position in the transatlantic market and continuing to develop its services in the United States, in addition to offering flights to the South and within Canada. At the height of the summer season, it will operate more than 250 direct weekly flights on 69 direct routes.

Expanded service to Europe starting in April

From Montreal and starting in April, Air Transat will gradually resume its direct flights to 16 European destinations including, for the first time, Amsterdam. Customers will once again be able to travel non-stop to Athens, Basel-Mulhouse, Barcelona, Brussels, London, Madrid, Porto, Romeand Venice, as well as to the French provinces, including Bordeaux, Lyon, Marseille, Nantes, Niceand Toulouse. In addition, the airline currently offers flights to Malaga and Lisbon, as well as a daily service to Paris, which will increase to up to 14 flights per week during the summer.

From Quebec City, Air Transat will be the only airline to offer nonstop service to two European capitals: first, to Paris starting in early April and, for the very first time and exclusively, to London in May.

From Toronto, Air Transat will serve 15 European cities this summer. Flights to Amsterdam, Athens, Barcelona, Dublin, Lamezia, Paris, Rome, Venice and Zagreb will once again be offered, in addition to the flights currently operated to Glasgow, Lisbon, London, Manchester and Porto. Furthermore, due to sustained demand for southern Portugal, Air Transat will now fly to Faro year-round.

*New route

Heading to the U.S. sun

Air Transat will land in California for the first time in its history, serving both San Francisco and Los Angeles from Montreal. And given the unfaltering popularity of Florida, the airline will be operating several of its flights year-round; namely, flights from Montreal to Fort Lauderdale and Miami, from Quebec City to Fort Lauderdale, and from Toronto to Fort Lauderdale and Orlando, will now be offered throughout the year.

*New route

Even more domestic flights and connections
Interest in domestic flights is not fading and all indications are that travel within Canada will still be popular this summer. That is why Air Transat will offer an enhanced flight program between Montreal, Toronto, Quebec City, Calgary and Vancouver.

These flights will also provide many Canadians access to international flights via connections in Toronto and Montreal.

The South, always popular even in summer
Because Canadians remain fond of the South even during the summer season, Air Transat will offer a wide selection of its most popular destinations in Mexico and the Caribbean from Montreal, Quebec City and Toronto.

Air Transat’s parent issued this report for the fiscal fourth quarter:

Encouraging signs since the resumption on July 30

For the fourth quarter:

• Revenues of $62.8 million
• Adjusted operating loss¹ of $58.4 million (operating loss of $118.3 million)
• Adjusted net loss¹ of $118.4 million (net loss attributable to shareholders of $121.3 million)

For the year:

• Revenues of $124.8 million
• Adjusted operating loss¹ of $213.9 million (operating loss of $401.2 million)
• Adjusted net loss¹ of $446.4 million (net loss attributable to shareholders of $389.6 million)

Financial position and financing:

• Cash and cash equivalents of $433.2 million as at October 31
• In total, the available financing represents a maximum of $820.0 million, of which $650.0 million was drawn down as at October 31, 2021

Transat A.T. inc., a holiday travel reference worldwide, particularly as an air carrier under the Air Transat brand, announces its results for the fourth quarter and fiscal year ended October 31, 2021.

“Since we resumed operations on July 30, business has been growing steadily. We met and exceeded our targets for resumption of operations in the last quarter and reduced our use of cash. The winter season that is now beginning will see the continuation of our return to more significant volumes. While we remain cautious given the evolving variants, we remain optimistic that we’re on track to returning to normal. Meanwhile, we’re continuing our transformation. Following the extensive streamlining of our fleet that has been ongoing for several years, the codeshare agreement announced this quarter is the first step forward in our alliance strategy, with further advances to follow in the coming months,” stated Annick Guérard, President and Chief Executive Officer, Transat.

“For the winter, we plan to operate from eight Canadian airports to eight destinations in Europe, 22 in the South and five in the United States, including Miami and Fort Myers, where we’ll be flying for the first time. To do that, we will be deploying capacity that will grow from 50% to 75% of pre-pandemic capacity over the winter. We will then build volume further for the summer season, which will include two new routes to Europe and two new destinations in the United States.

“We started 2022 with over 2,000 employees, compared with only 750 at the height of the crisis, and the volume we project will allow us to recall about 1,500 more during the year. It’s heartwarming to see our employees gradually taking back up their positions with us. They are the reason that Transat is what it is today, and they are the ones who will build tomorrow’s growth and success,” Ms. Guérard concluded.

Fourth-quarter highlights

For the fourth quarter, the Corporation generated $62.8 million in revenues, up $34.4 million (120.9%) from $28.4 million for the corresponding period of 2020. This increase results from the partial resumption of operations at a higher level in 2021 compared with 2020. The Corporation continues to closely monitor demand in order to adjust capacity, which remains below 2019 levels since the resumption of airline operations on July 30.

Operations generated an operating loss of $118.3 million, compared with $239.3 million in 2020, an improvement of $121.0 million. In 2021, the operating loss was aggravated by special items of $20.3 million, including an aircraft impairment charge of $9.1 million, termination benefits of $6.7 million and impairment of contract balances of $4.5 million, comprising mainly prepaid expenses related to commissions paid to travel agents and credit card fees. In 2020, the operating loss was aggravated by special items totaling $96.7 million and unfavorable settlements of fuel-related derivative contracts. Transat reported an adjusted operating loss¹ of $58.4 million compared with $90.7 million in 2020, an improvement of $32.4 million. This improvement is related to higher load factors across all of our markets based on increased capacity and unfavorable settlements of fuel-related derivative contracts in 2020.

Net loss attributable to shareholders amounted to $121.3 million or $3.21 per share (diluted) compared with $238.1 million or $6.31 per share (diluted) for the corresponding quarter of last year. In 2020, the net loss attributable to shareholders was aggravated by special items totaling $96.7 million and unfavorable settlements of fuel-related derivative contracts. Excluding non-operating items, Transat reported an adjusted net loss¹ of $118.4 million or $3.14 per share for the fourth quarter of 2021, compared with $156.4 million or $4.14 per share in 2020.

Fiscal year highlights

For the fiscal year as a whole, the Corporation recognized revenues of $124.8 million, a decrease of $1.2 billion (90.4%) compared with 2020. Since mid-March of 2020, restrictions on international travel and government-imposed quarantine measures have made travel sales very difficult. Due to the global  COVID-19 pandemic, the Corporation suspended its airline operations on January 29, 2021 for the second time since March 2020, until their partial resumption on July 30, 2021. For the first half of winter, demand was very weak and the Corporation’s capacity represented a fraction of the 2020 level. These factors caused the fall in revenues. Conversely, for the summer season, since the partial resumption of airline operations, demand has been growing steadily and load factors have been higher compared with 2020. However, the Corporation’s capacity remained lower than in 2019.

In 2021, operations generated an adjusted operating loss of $401.2 million compared with $426.0 million in 2020, an improvement of $24.7 million. Transat reported an adjusted operating loss¹ of $213.9 million compared with $122.2 million in 2020, a deterioration of $91.7 million.

Net loss attributable to shareholders amounted to $389.6 million or $10.32 per share (diluted) compared with $496.5 million or $13.15 per share (diluted) for the previous year. Excluding non-operating items, Transat reported an adjusted net loss¹ of $446.4 million or $11.83 per share for the year ended October 31, 2021, compared with $355.3 million or $9.41 per share in 2020.

Financial position

As at October 31, 2021, cash and cash equivalents amounted to $433.2 million, compared with $426.4 million on the same date in 2020.

In total, the available financing represents a maximum of $820.0 million, of which $650.0 million was drawn down as at October 31, 2021. Of the drawn down amount, a total of $310.0 million was used to repay travelers who were scheduled to leave after February 1, 2020, for which a travel credit had been issued due to  COVID-19 and who had requested to be reimbursed.

Deposits from customers for future travel amounted to $292.2 million, compared with $608.9 million as at October 31, 2020, a decrease of $316.7 million. This change was due to refunds of travel credits made during the summer of 2021.

On April 29, 2021, the Corporation entered into an agreement with the Government of Canada that allows it to borrow, among others, an amount of $310.0 million to issue refunds to eligible travelers. Customers had until August 26, 2021 to submit their refund requests. The Corporation received requests for about $460.0 million and made refunds for approximately 99% of amounts claimed as of late November 2021.

The working-capital ratio was 1.14, compared with 0.84 as at October 31, 2020. The improvement in working capital resulted mainly from the travel credits refunded during the year and financed partly by the drawdowns on credit facilities.

Off-balance-sheet arrangements, excluding contracts with service providers, stood at $549.8 million as at October 31, 2021. This amount mainly consists in commitments to take delivery of the seven A321neo LRs undelivered as at that date.

Outlook

Across all of our markets, average capacity for winter 2022 is 60% of 2019 capacity, increasing from 50% to 75% over the course of the season. On the sun destinations program, the Corporation’s main program for winter season, Transat’s capacity in 2022 represents 55% of 2019 capacity. On the transatlantic program, where it is the low season, Transat’s capacity represents 65% of 2019 capacity. In addition, the Corporation is increasing its presence in the cross-border market with capacity growth of 45% compared to 2019 winter season capacity.

The Corporation continues to apply a series of operational, commercial and financial measures, including cost reduction, aimed at preserving its cash. The Corporation continues to monitor the situation daily to adjust these measures as it evolves.

Despite recent uncertainty related to the emergence of a new variant, the current situation shows encouraging signs such as the level of bookings observed and the increase in the vaccination rate. However, it remains impossible for the moment to predict the impact of the COVID-19 pandemic on future bookings, and on financial results. Consequently, for now the Corporation is not providing an outlook for winter 2022.

Changes to the Board of Directors

Messrs. Jean-Yves Leblanc and Louis-Marie Beaulieu informed the Corporation that they will cease to act as directors effective December 31, 2021. At the meeting of December 8, 2021, in order to fill these vacancies, the Board appointed Mr. Daniel Desjardins and Ms. Julie Tremblay to the Board, effective January 1, 2022. Further, Mr. Desjardins was also appointed to the Audit Committee and Ms. Tremblay was appointed to the Human Resources and Compensation Committee effective January 1, 2022.

Due to Mr. Leblanc’s departure, at its meeting of December 8, 2021, the Board of Directors appointed Ms. Lucie Chabot as Chair of the Audit Committee effective January 1, 2022.

Daniel Desjardins, Ad.E, is an independent director. Mr. Desjardins is an accomplished business lawyer and executive with extensive experience in business law, compliance and risk management, as well as decades of experience in financing and complex mergers and acquisitions.For more than 20 years, until December 2019, Mr. Desjardins was Senior Vice-President, General Counsel and Corporate Secretary at Bombardier Inc. From 2018 to January 2021, he served as Chair of the Board of Directors of Bombardier Transportation. Mr. Desjardins has been Chair of the Board of the Legal Leaders for Diversity Trust since 2014 and is Chair of the Board of Directors of the Pointe-à-Callière museum. Mr. Desjardins has received numerous professional recognitions and has twice been named one of Canada’s 25 most influential lawyers. In 2017, the Barreau du Québec awarded him the Advocatus Emeritus distinction in recognition of his exceptional professional career. Mr. Desjardins holds a law degree from the Université de Montréal and a Master of Laws degree from McGill University.

Ms. Julie Tremblay served as President and CEO of TVA Group and CEO of Quebecor Media Group and as a member of the TVA Group Board of Directors from July 2014 until her retirement in October 2017. Between 1989 and 2014, she held various senior positions within Quebecor Inc., notably as Vice President, Human Resources of Quebecor Inc. and Quebecor Media Inc. for more than eight years, as well as Chief Operating Officer and then President and Chief Executive Officer of Sun Media Corporation. Prior to joining Quebecor Inc., Ms. Tremblay practiced labour law and employment law with a prominent Montreal law firm. She has also been a director of Fondation Montreal, the Society for the Celebrations of Montréal’s 375^th Anniversary and the Chamber of Commerce of Metropolitan Montréal. Ms. Tremblay holds a Bachelor’s degree in Political Science from McGill University and a Bachelor’s degree in Civil Law from Université de Sherbrooke.