Business and Finance

Transat A.T. Inc said yesterday it fell to a third-quarter loss as the holiday travel firm was hurt by rising fuel costs.

The parent company of Air Transat lost $2.4 million, or 7cents a share, in the period ended July 31, down from a profit of $16.1 million, or 47 cents a share in the same period last year.

Before the impact of hedge accounting standards, Transat said it earned $700,000, or 2 cents a share, as revenue rose 15.9 per cent to $859.9 million from $741.8 million, helped in part by a rise in passengers in Canada and Europe.

Analysts on average had looked for earnings of 23 cents a share on revenue of $834.58 million, according to Reuters Estimates.

Results were hit as Canadian tour operators had a tough time factoring high fuel prices into selling prices, although the negative impact was partially offset by good performance in its European operations, Transat said.

"Oil prices have diminished since the end of the quarter but, still, they have quickly reached unprecedented levels and remain very high," Jean-Marc Eustache, president and chief executive, said in a release.

Price increases and hedging merely limit the negative impact of this situation, Eustache said, noting the firm’s fuel bill rose more than $30 million compared with last year.

Transat expects higher revenue in the fourth quarter than the year earlier period but warned "unpredictable fluctuations" in fuel prices could hit margins in North America.

Its stock closed in Toronto down 63 cents a share to $17.30 payday loan.

Reuters News Agency

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