MONTREAL -- Travel company Transat AT Inc. has seen daily bookings drop off since late February, with a steep year-over-year decline this month as travel fears spread with COVID-19.
Daily bookings fell 50 per cent year-over-year in the last few days, chief financial officer Denis Petrin told shareholders at their annual meeting in Montreal on Thursday.
"Since Feb. 24, daily bookings are lower than last year's and the difference has increased significantly in recent days. In the current situation, it is impossible to predict the effect on future bookings," the company said in its first quarter results.
With its "outlook overshadowed by COVID-19," Transat opted not to provide an outlook for the second quarter or the summer -- which now touts lower prices to attract wary travellers.
Shares in the company plunged nearly 22 per cent in early trading Thursday morning before regaining some of their losses. Transat shares were down $1.96 at $10.79 in early afternoon trading.
Travel fears and U.S. President Donald Trump's travel ban on most of Europe are expected to dent Transat's transatlantic business -- the bulk of its operations between May and October -- Laurentian Bank analyst Mona Nazir said in a research note.
The Montreal-based firm has shifted to cost-reduction mode, which could include cutting flights, it said.
"We're taking all the necessary measures to allow our clients to travel with peace of mind," chief executive Jean-Marc Eustache said in the release.
"We're satisfied with the improvement in results for the first quarter, even though the coronavirus epidemic makes the rest of the year difficult to predict."
The comments came as Transat reported a first-quarter loss of $33.8 million or 90 cents per diluted share compared with a loss of nearly $53 million or $1.41 per diluted share in the same period a year earlier.
An upswell of travellers to Transat's sun destinations boosted revenues by seven per cent year over year to $692.8 million for the quarter ended Jan. 31, as the number of beach seekers grew 10.8 per cent.
On an adjusted basis, Transat said it lost 54 cents per share for the quarter compared with an adjusted loss of $1.04 per share in the same period a year earlier. Analysts had expected an adjusted loss of 50 cents per share, according to financial markets data firm Refinitiv.
Shareholders at Transat, which owns Air Transat, approved a $720-million acquisition offer from Air Canada in August, but the deal still faces scrutiny by regulators eyeing the impact of a takeover that will see Air Canada control about 62 per cent of transatlantic air travel from Canada.
Transport Canada has until May 2 to conduct a review -- with input from the Competition Bureau -- and make a recommendation to the minister.
Major Canadian airlines are feeling turbulence as the novel coronavirus triggers event cancellations and ailment anxieties across the globe.
Air Canada has halted daily flights to Rome, Beijing and Shanghai through April, and cut back on routes to Hong Kong, Tokyo and Seoul. Its shares dropped 47 per cent over the past four weeks before falling another 10 per cent to $24.77 in mid-morning trading Thursday.
WestJet, despite offering no flights to China and only a handful to Europe, plans to cancel routes amounting to 12 per cent "or more" of its flight capacity.
This report by The Canadian Press was first published March 12, 2020
