(Reuters) - Canadian travel operator Transat AT Inc TRZa.TO TRZb.TO said it expected to return to profitability this year after it reported a smaller-than-expected quarterly loss as prices rose and its efforts to cut costs paid off.
The company, which offers holiday travel services in package and air-only formats, said second-quarter selling prices and margins were higher than a year earlier.
“We reached our cost-reduction targets, and despite a challenging winter selling prices were higher than last year, hence the improvement in our results,” Chief Executive Jean-Marc Eustache said in a statement.
“The summer is looking fairly good and we expect to be back to profitability this year,” he added.
Transat, which also holds an interest in a hotel business that owns and operates properties in Mexico and the Dominican Republic, said selling prices in the Transatlantic market rose about 5 percent.
Revenue fell 8.3 percent to C$1.11 billion in the second quarter after the company reduced capacity. The number of passengers fell 13.7 percent, Transat said.
The company’s net loss widened to C$22.8 million ($22.4 million), or 59 Canadian cents per share, in the second quarter from C$13.2 million, or 35 Canadian cents per share, a year earlier.
Adjusted after-tax loss was 4 Canadian cents per share for the three months ended April 30.
Analysts on average had expected a loss of 26 Canadian cents, according to Thomson Reuters I/B/E/S.
Transat’s Class B shares closed at C$5.31 on the Toronto Stock Exchange on Wednesday.
Reporting by Vijay Vishwas in Bangalore; Editing by Don Sebastian