Voices of Travel

TRANSAT: Set to internalize medium-haul operations

Transat A.T. Inc. will add Boeing B737 narrow-body jets to Air Transat’s fleet, which currently comprises Airbus A310 and A330 wide-body aircraft, beginning in 2014. In doing so, the company will internalize its medium-haul operations outbound from Canada to sun destinations in Mexico, the Caribbean and Florida, for which it has relied on a third-party partner since 2003. Some of the new aircraft will be permanently attached to the fleet. In winter, when demand on sun destination routes is higher, additional aircraft will be introduced on a seasonal basis. Eventually, Transat plans to operate five narrow-body aircraft permanently and six seasonal aircraft in winter. Air Transat’s wide-body fleet, which operates on the transatlantic market on an annual basis, will continue to serve certain sun destinations as well. In the years to come, the number of wide-body aircraft will be reduced and third-party carriers could be used in high season. In the same spirit, Transat should maintain its business relationship with its current partner, CanJet Airlines, beyond April 30, 2014 for certain flights. This strategy aims to ensure a so-called “accordion”fleet that meets the needs of the tourism market. In preparation for the introduction of narrow-body aircraft to its fleet, Air Transat recently reached agreements with its employees that will enable a reduction in operating costs. Internalization of medium-haul operations, including the impact of the said agreements, should generate savings of some $8 million in 2013, $15 million in 2014 and $30 million per year in 2015 and beyond. In addition to the positive impact on operating costs, the grouping of operations under the same roof will pave the way for increased standardization of services to travellers and customer experience. “A return to profitability remains our primary goal, and operating costs, particularly air costs, are an essential factor in profitability for any tour operator,”said Jean-Marc Eustache, president and chief executive officer. “Internalizing medium-haul operations has several advantages, including increased control over our aviation operations, the implementation of a more competitive cost structure and having Air Transat cabin crews on all of our flights.”

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