In less than a month, Transat A.T. Inc. will fly record numbers of customers to its summer holidays.
This past summer, in preparation for business on its North Atlantic routes, the French tourism company broke from its prior practice of covering all sorts of routes. It eliminated the presence of its brand Jet2.com on nine North Atlantic routes and began offering fewer flights for certain times of the year — along with cheaper flights — to encourage more Canadians to book a Transat vacation.
The strategy worked. While industrywide travel volume declined in North America in 2018, Transat’s volumes increased a combined nine per cent and operating earnings before interest, taxes, depreciation and amortization increased by 16 per cent in that region.
Now, Transat wants to ramp up operations for the summer season, which officially started on February 1. It previously reported that it would lay off 1,700 staff by the end of January, including 1,250 cabin attendants. However, the Montreal-based company said in a press release that “some potential outplacement has been postponed.”
Still, the company reported that it would lay off 900 additional workers on top of its previously reported 1,200 layoffs, bringing its total to 2,300.
Further, as the economic downturn in some regions such as Brazil and Argentina continues, Transat expects to sell fewer winter and summer vacations than it did last year.
Transat has also shifted business to regions with lower costs and a more positive outlook, which included Portugal and Spain.
Last year, the company reported $417 million in net losses as it suffered from a supply squeeze and higher fuel prices. It was Transat’s second consecutive annual loss.
Despite the difficult circumstances, Transat said it has “worked to increase connectivity and the convenience of our customers” over the past six months.
This past year, Transat launched a “digital transformation strategy.” The company said the initiative will include new customer experiences for customers, including a search and booking mobile website, richer content through it’s redesigned mobile apps, and new loyalty programs. It plans to invest more than $36 million in the initiative.
It will also be spending $600 million to complete the development of its long-range MD90 fleet. The aircraft, purchased from Airbus in 2015, are equipped with digital kiosks to allow travelers to check their baggage, confirm boarding and pay flight taxes and fees with an iPhone.
Transat says that since the introduction of its retail loyalty program, Elevate, its Canadian customers have racked up over $10 million in savings. Elevate members can get additional savings for four weeks after purchase.