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Transat A.T. Inc. announces a reorganization of the structure of Look Voyages and of the operations of Americanada
Transat A.T. Inc. today announced aredundancy plan within the framework of the reorganization of the operationsof French subsidiary Look Voyages (a proposed social plan has been filed inaccordance with labour legislation in France). At the same time, the Corporation announced a reorganization of the operations of Canadian touroperator Americanada.
"The current global economic situation has had a sustained unfavourableimpact on tourism since September 2001. Many of Look Voyages's leadingdestinations have been considerably affected, and consequently, this company'sresults are disappointing," stated Jean-Marc Eustache, President and ChiefExecutive Officer of Transat. "As I stated at Transat's annual shareholdermeeting, we will work together with the management team and employees to makethe required adjustments to ensure a profitable future for this company. This plan would unfortunately involve laying off some 90 employees," he continued.
The Corporation has entered into negotiations with regulatory authorities inFrance and is therefore not currently in a position to disclose the amountassociated with the restructuring charge or the savings connected to the filing of the social plan. A provision for the restructuring charge will befully reflected in the Corporation's results for its second fiscal quarteralong with information regarding the annual savings.
In addition, the objective of the reorganization of Canadian touroperator Americanada is to place each of the product lines marketed by thetour operator in a business setting that provides them with the greatestchance for developing in an economically profitable way. "This decision willunfortunately result in the layoff of some 150 employees for whom measures will be taken to provide outplacement assistance," added Mr. Eustache.
As a result of these cost-reduction efforts and a possible impairment inthe value of certain Americanada assets, Transat will record a pre-taxrestructuring charge of approximately $2.5 million in relation to Americanada, in the second quarter. Of the total amount, cash charges will be approximately $2 million.
The reorganization of Americanada's operations will, however, result in annual before-tax savings of approximately $6 million, whose effectwill be felt beginning in the third quarter."These announcements are part of Transat's ongoing efforts to focus onreducing its costs, by working on its operational efficiencies, and byensuring all of its products and services not generating desired returns areremedied," concluded Mr. Eustache.
About Transat A.T. Inc.
Transat A.T. Inc., with its head office in Montreal, is an integratedcompany specializing in the organization, marketing, and distribution ofholiday travel. The core of its business consists of tour operators in Canadaand France. Transat is also involved in air transportation, value-addedservices at travel destinations, as well as in distribution through travelagency networks. Transat is a public corporation listed on the Toronto StockExchange (TSE:TRZ).
This news release contains certain forward-looking statements withrespect to the Corporation. These forward-looking statements, by their nature,necessarily involve risks and uncertainties that could cause actual results todiffer materially from those contemplated by these forward-looking statements. The Corporation considers the assumptions on which these forward-lookingstatements are based to be reasonable, but cautions the reader that theseassumptions regarding future events, many of which are beyond its control, mayultimately prove to be incorrect since they are subject to risks anduncertainties that affect the Corporation.
For additional information withrespect to these and other factors, see the Annual Information Form and AnnualReport (Management Discussion and Analysis) filed with Canadian securitiescommissions. The Corporation disclaims any intention or obligation to publiclyupdate or revise any forward-looking statements, whether as a result of newinformation, future events or otherwise.