A first net profit since the pandemic and a warning of an uncertain future that is evaporating; Transat A. T. turns the page on the pandemic. To prevent its rise from being hampered by the shortage of pilots, the company is preparing to deploy its own intensive training program, La Presse has learned.
The leisure travel specialist is therefore adopting a well-established trend in Europe as well as with major North American carriers such as Delta Air Lines, United Airlines and American Airlines. In Canada, the low-cost carrier Flair Airlines has just turned to this option.
Transat should make the announcement in about two weeks, according to an internal communication from the Quebec company that La Presse was able to consult. Questioned during an interview, its chief financial officer, Patrick Bui, confirms.
“It is certain that we are giving ourselves another tool to alleviate the pilots’ file,” he said. We wanted to set up this program. »
Traditionally, in the Canadian model, pilots generally spend several years flying small aircraft before being hired by large carriers, which operate larger aircraft.
Air Transat says it hires around 10 pilots per month and ensures that it has the necessary workforce to increase its capacity. The increase will be 23% for the winter season with the addition of three new aircraft from the Airbus A321 family. The fleet of the blue star company will then number 40 aircraft.
All carriers nevertheless face recruitment difficulties.
“We project that nearly 10% of our active pilots [will] retire in the next five years,” it is explained in the internal missive. We will therefore need to hire significantly in the future, while facing the reality of the current labor shortage. »
The airline industry is struggling with a shortage of pilots, a phenomenon exacerbated by the health crisis and the arrival of new low-cost airlines, which are putting pressure on the pool of candidates. This situation, for example, prompted Air Canada to cancel its direct flight offer from Quebec to sun destinations for fall 2023 and 2024.
“To meet the growth plans of Canadian carriers (without taking into account replacements due to retirements), the pool of airline pilots would need to increase by approximately 30%,” underlined Cameron Doerksen, of Banque Financière National, in a recent report.
According to the analyst, this problem will end up weighing on the growth of certain players in the industry. Mr. Bui believes that Air Transat will succeed, in particular because it offers pilots the opportunity to fly large aircraft, such as A330s – an opinion shared by Mr. Doerksen.
The third quarter, which ended on July 31, constitutes an important step in Transat’s recovery: it is the first time that it has recorded a quarterly profit since the outbreak of COVID-19.
Beyond the results which exceeded analysts’ expectations, the raised financial forecasts and a demand which does not seem to be fading, the parent company of Air Transat has taken an action, unnoticed, which illustrates that the sky is finally clearing up.
“It takes a weight off,” acknowledges Mr. Bui. That’s great. We had a record quarter, we are returning to profitability and we are generating cash. There is no reason to have this type of rating. »
Transat still carries a heavy net debt of around 1.5 billion. Its chief financial officer is aware that it must be reduced, but the company’s turnaround allows him to see “more favorable refinancing scenarios”.
As of July 31, the company had generated cash flow of 246 million. This amount should have decreased by the end of the fourth, Mr. Bui warned, but there will remain a surplus at the end of the financial year. This money will be used to reduce the level of debt.
On the floor of the Toronto Stock Exchange, investors welcomed Transat’s performance. The stock gained 35 cents, or 8.5%, to $4.48.
