If Canadian carriers Air Transat and Porter Airlines were previously courting each other with a codeshare partnership, they just got engaged with their recently announced joint venture.
”The beauty of this relationship is, if you look at our networks today, there is almost no overlap,” Kevin Jackson, Porter’s chief commercial officer, tells FlightGlobal on 29 November. ”It allows each other to come together and feed each other’s networks and be nearly entirely incremental in benefits to the other carrier.”
The collaboration makes sense on several levels, according to executives from both companies. Air Transat and Porter have been acquiring new and highly efficient aircraft to support longer ranges and network expansion plans, and both have well-established presences in Eastern Canada and reasons to team up in a relatively crowded Canadian airline market.
The companies say the planned business collaboration will pay long-term dividends, as Air Transat and Porter will coordinate flight schedules and routes in an effort to expand their respective networks – and compete with Air Canada and WestJet.
“This is an incredible opportunity that has the potential to transform the competitive landscape in Canada,” Michael Deluce, Porter’s chief executive, said in a 28 November social media post. ”There will now be a stronger third option for consumers in the Canadian market by better integrating much of Air Transat’s international and sun destinations with Porter’s quickly expanding North American network.”
In a plan to be implemented gradually starting next year, Toronto-based Porter’s network – which has recently expanded across Canada and to the USA – will begin feeding Air Transat’s long-haul flights to Africa, the Caribbean and Europe.
“It’s about developing a competitive network, expanding our footprint – especially on the transatlantic market – and growing those markets thanks to the feeding of Porter,” Sebastian Ponce, Air Transat’s vice-president of network planning and alliances, tells FlightGlobal on 29 November. “The idea is that by combining forces together, we can concentrate on what we do best.”
The agreement builds on the codeshare partnership that the pair of airlines have been developing for more than a year.
“Now we get to work together to time our flights and their flights, and utilise our slots at Toronto Pearson and Montreal in ways that optimise feed across the networks,” Porter’s Jackson says. “We have not been able to do that, historically.”
The move comes amid much manoeuvring among Canadian airlines, with Calgary-headquartered WestJet recently boosting its position by completing its integration of Sunwing Airlines and fully integrating low-cost subsidiary Swoop, and recently established ultra-low-cost carriers Canada Jetlines and Lynx Air competing with Flair Airlines for market share.
The partner airlines are watching the growth of ultra-low-cost carriers (ULCCs) within Canada “very closely”, Ponce says. ”We believe there may be too much capacity in the domestic market.”
Air Transat is currently a distant third behind of Air Canada and WestJet in terms of numbers of aircraft and available seat miles, Ponce says. “When we add Porter to that, then the situation becomes much more interesting, right? The fact that Porter is increasing its fleet up to 100 Embraer [aircraft]… and Air Transat having the very strong network in the international market creates a real alternative for Canadians.”
Indeed, the combined fleets of the two carriers would be formidable – currently totalling about 90 aircraft and growing rapidly – and cover the spectrum from regional turboprops to widebody jets.
For comparison, WestJet operates 121 aircraft – 114 Boeing 737s and seven 787s. Air Canada’s fleet is nearly 190 aircraft strong, in addition to 40 aircraft operated by low-cost subsidiary Air Canada Rouge, according to Cirium fleets data.
Porter has short- and medium-haul flights in hand with its fleet of 29 De Havilland Canada Dash 8s and 24 Embraer 195-E2s. With a recent order for 25 more E195-E2s, Porter currently has unfilled orders for 51 of the type, and options for a further 25 aircraft.
Air Transat, meanwhile, is focused on long-haul flights – increasingly of the transatlantic variety – with its fleet of 22 Airbus A321s, 12 A330s and three Boeing 737 Max.
The Montreal-based carrier also holds long-term lease orders for four new Airbus A321XLRs – a long-range variant that is yet to be certificated – that are scheduled to be delivered starting in 2025. The single-aisle aircraft are capable of nonstop flights of up to 11h and 4,700nm (8,700km). Ponce calls the A321XLR “the right tool to cover international markets”.
From Porter’s perspective, the joint venture with Air Transat will allow it to focus on mid-sized markets in the USA and domestically. “Our feed into their market suddenly makes those mid-sized markets more attractive – especially with 132-seat aircraft, versus 190-seat Max 8 that someone else might fly.”
”It really opens up the destinations for us that we can support with high frequency across North America,” he adds.
Meanwhile, Air Transat’s network of vacation destinations will become available to all Canadians – not just those living in Quebec. “All of those Canadians who live west of Toronto can now fly Transat, which historically they really couldn’t do,” Jackson says.
Perhaps most of all, the alliance between the pair of Canadian carriers will put them on greater footing when going eye-to-eye with competitors, Jackson says.
“When you look at alternatives in the market – whether it’s a ULCC, or the combined Sunwing and WestJet, or you look at what Rouge and Air Canada are doing – our alliance will be able to compete significantly and successfully with those carriers.”