Air Transat offers little clarity of when its, and parent company's, fortunes will turn

Hopes by Canadian tour operator Transat of a return to profitability during 2012 are quickly diminishing as the carrier during the first half of the year racked up a net loss of CAD43 million (USD41 million) driven by a fiscal 2Q loss that resulted from challenges created in the Canadian "sun destinations" from overcapacity and competitive pricing pressure. Heading into the busy summer travel season the bulk of capacity operated by Transat subsidiary Air Transat is being deployed to Europe, where market conditions are highly uncertain due to the continent's economic turmoil. Transat management is warning that turning around the losses incurred during the last six months will be difficult, but the company has managed to gain concessions from pilots and flights attendants in the form of three-year wage freezes and expects mechanics to endorse the scheme.

Even though Transat is likely to post a loss in 2012 after incurring a CAD12.2 million (USD12 million) loss in 2011, the company does expect to achieve its previously stated goal of improving pre-tax earnings this year by CAD20 million (USD20 million).