Miami – Canadian leisure airline Air Transat (TS) is set to permanently lay off around 2,000 employees unless the situation “improves rapidly” according to airline president and CEO Jean-Marc Eustache.
COVID-19 hit hard on TS, which relies on international travel to Latin America, the Caribbean, and Europe, forcing the airline to completely suspend operations between April and late July. Around 70% of the workforce is already temporarily laid off with wages supplemented by the governmental Canada Emergency Wage Subsidy, covering up to C$857 or US$642 a week for each employee.
1,000 employees were recalled on July 23 as TS resumed a limited schedule using 6 Airbus A321neoLRs after the pandemic forced the retirement of the remaining Airbus A310s.
TS also plans for winter route expansion, with new domestic and international routes from the Vancouver, Toronto, and Montreal hubs beginning on November 1.
Uncertain Future for Air Transat
With revenue down by 99%, TS closed the quarter with around C$576m in liquidity having burned through C$156m during a three-month period.
Reportedly “in advanced discussions” towards obtaining additional financing, TS also faces a takeover bid from Air Canada (AC) at C$18 per share pending approval by the Canadian government. With regulatory approval, the sale will likely occur. However, the airline also faces a competition investigation by the European Commission expected to conclude by December 11.
Air Transat now looks to an uncertain future but almost certainly one at a smaller size, at least in the short term.
Featured image: Air Transat A321neo. Photo: Quintin Soloviev