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Canadian holiday travel operator Transat A.T. Inc. reported a wider first-quarter loss, hurt mainly by high fuel costs, and the Canadian holiday travel operator forecast a slightly weaker second quarter.

Market conditions made it impossible to increase selling prices to fully offset the increase in aircraft fuel costs, chief executive officer Jean-Marc Eustache said in a statement.

The Quebec-based company, which operates mainly in Canada and Europe, has been hit by stiff competition, especially to North American sun destinations.

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The company, which competes with WestJet Airlines' WestJet Vacations, Air Canada's Air Canada Vacations and Sunwing Vacations, said margins were also hit due in part to tough market conditions in France.

The rising aircraft fuel costs was particularly felt on transatlantic routes, said Transat, which mainly operates flights on this route.

For the November-January quarter, Transat's net loss attributable to shareholders was $29.5-million), or 77 cents a share, compared with a net loss attributable to shareholders of $13.4-million, or 35 cents, a year ago.

It reported an adjusted after-tax loss of 79 cents a share.

Revenue rose 2 per cent to $829.3-million, due to higher average selling prices.

Last October, the company said it would lay off 115 employees to save $10-million a year and return to profit.

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