Cost-cutting and a better matching the number of seats being offered to the demands of travellers helped travel and airline company Transat A.T. Inc. post a stronger third-quarter profit.
The Montreal-based company reported revenue of $927-million in the quarter, up from $909-million a year ago. Net quarterly income rose to $41-million, $1.07 per share, from $9.4-million, or 25 cents a share in the third quarter of 2012.
Adjusted after-tax income in the period was $30.8-million, or 80 cents a share, up from $10.5-million, or 28 cents a share a year ago.
The company's North American business revenue surged 13 per cent, although this was partly due to an accounting switch in which sales in North America of flights between Canada and the U.K. had been accounted for as part of its European business. However, it's the balancing act of not offering too many seats, while offering enough to meet customer demand, which could carry Transat to a profitable year, the company indicated Thursday.
Looking ahead to the rest of the year, Transat said that its capacity of seats on flights outbound from Canada and Europe is 9-per-cent lower from August to October, compared with last year. Of those seats, 81 per cent of capacity has been sold to date, the company said, and selling prices are 6 per cent higher than in 2012. For sun destination flights departing from Canada, capacity is marginally higher at 1 per cent above the previous year's levels, while prices are also rising.
"We are very satisfied with the results, as this is our best third quarter ever," said Jean-Marc Eustache, President and Chief Executive Officer of Transat. "We performed very well on the transatlantic market, and the implementation of our cost-reduction and margin-improvement program is unfolding as planned. And as the numbers indicate, we are on our way to a profitable year."