Toronto 
THE CANADIAN PRESS/Paul Chiasson
The head of Transat AT is calling on government for financial support so the travel company can refund passengers whose flights were cancelled due to the COVID-19 pandemic.
“I say clearly to the various level of government, help us find a solution that is acceptable to all stakeholders, and we are all for it,” CEO Jean-Marc Eustache said on a conference call with analysts Thursday.
Canadian airlines have generally offered travel credit instead of reimbursements for the hundreds of thousands of trips that never took place amid border shutdowns and quarantines.
Eustache’s remarks came as the tour operator reported a lost of $179.5 million for the quarter ended April 30, compared with a loss of less than $1 million a year earlier.
Transat said Thursday it would resume operations on July 23 after grounding its fleet on April 1, with plans to gradually start flying on 23 international routes and some domestic ones.
However, Ottawa continues to require a 14-day quarantine for all arrivals, making travel outside the country a “non-starter” for Canadians, National Bank analyst Cameron Doerksen said.
Eustache stressed the contrast between Canada’s lack of sector-specific support and the billions in financial aid by other governments to justify the absence of refunds to Canadian customers.
“What is overlooked is that the government demand (for reimbursement) has been accompanied by assistance plans that are out of all proportion to what we have seen in Canada,” he said.
Transportation authorities in the United States and European Union have required airlines, including foreign ones, to offer refunds for flights cancelled as a result of the pandemic, which has shuttered borders and grounded fleets.
Unlike its U.S. and many European counterparts, Ottawa has also held off on handing out grants or loans particular to the airline sector, turning instead to a wage subsidy accessible to most employers and loans starting at $60 million for large companies.
Meanwhile, Air Canada’s deal to buy Transat for $720 million has been agreed to by shareholders, but still requires regulatory approval in Canada and the EU.
Eustache said Thursday that the fallout from the pandemic “could impact the possibility of reaching an agreement with regulatory authorities,” as concessions on market share — often required in order to get the green light on an acquisition that reduces competition — may no longer be feasible given the collapsing market for air travel.
Last month, European regulators launched an in-depth investigation into the deal amid European Commission concerns it may reduce competition and result in higher prices.
A preliminary European Commission investigation worried the proposed deal could significantly reduce competition on 33 origin and destination city pairs between Europe and Canada.
These include 29 where both companies offer direct services and four where one company flies direct and the other one indirect via one of its hubs.
Revenue in what was the Transat’s second quarter fell to $571.3 million compared with $897.4 million in the same quarter last year.
On an adjusted basis, the Montreal-based company reported a loss of $38.8 million or $1.03 per share for the quarter compared with an adjusted loss of $6.4 million or 17 cents per share in the same quarter a year ago.
This report by The Canadian Press was first published June 11, 2020.
Christopher Reynolds, The Canadian Press
