Yahoo Finance Porter to unveil more airline partnerships in 2024 amid expansion ramp-up
Porter Airlines’ chief executive says the carrier plans to announce several new airline partnerships in 2024, similar to its recently inked deal with Alaska Airlines, as the company continues on its aggressive expansion plan.
“We expect to be announcing a number of new partnerships over the next year,” Porter CEO Michael Deluce said in an interview with Yahoo Finance Canada, adding that the airline is “in various stages of either negotiation or implementation” of codesharing deals with other carriers.
“Porter’s broad domestic network is very attractive for partner carriers, and these sorts of partnerships allow greater penetration of markets you otherwise wouldn’t serve and really add traffic on an existing network.”
Earlier this month, Porter signed a new deal with Alaska Airlines that will allow passengers to fly to 18 western U.S. destinations, including Portland, Seattle, San Diego and Phoenix, via an Alaska Airlines connection. This came just two weeks after the company announced a joint venture with Air Transat, which expands on the existing codesharing agreement between the two carriers and will allow Porter access to Transat’s transatlantic and sun destinations.
“It’s always about market expansion,” Deluce said.
“These (partnerships) really widen the market size that you’re offering… it’s not traffic you otherwise would have had. So it allows you to bolster your frequencies on domestic markets, and make the overall offering stronger.”
The new partnerships are part of what has been a transformational year for Porter. In February, the airline officially launched its aggressive growth strategy that expanded operations outside the confines of Toronto’s downtown Billy Bishop airport. With a new fleet of Embraer E-195-E2 jets – the airline will have received 29 new planes by the end of the year – Porter began flying out of Toronto’s Pearson International Airport to destinations across the country and in the United States.
And there’s more to come. Porter recently exercised purchase rights for an additional 25 E195-E2s, which will bring the total number of jets in its fleet to 75 when the planes are all delivered. It expects to have 50 jets in its fleet by 2025. The airline has also hired about 1,500 employees over the last 12 months, and will continue hiring as it adds more destinations in the new year.
Full steam ahead
Porter is a private company so it does not disclose its financial results but Deluce says total revenue in the first quarter of 2024 is on track to be up 300 per cent compared to last year.
But the expansion has had its bumpy moments. The airline had to initially cut back its schedule shortly after launch, although Deluce says this was not due to demand issues but challenges in getting all of its newly hired pilots trained and certified.
“We had to throttle back a little to allow the training system to catch up,” Deluce said. “Since then, we have been in a very good place.”
The Canadian airline industry has seen competition ramp up in recent years, with the launch of several new low-cost carriers such as Flair Airlines, Lynx Airlines, and Canada Jetlines. Porter says it is targeting economy travellers with its offering, which includes free snacks, beer and wine, complimentary Wi-Fi and a plane configuration that has no middle seats.
Deluce says the market for the most price-sensitive customers is crowded, and that it’s going to be “highly challenging” for the Canadian low-cost carriers going forward.
“I think it’s pretty clear that there’s a high probability of consolidation or failure amongst that group in the next 24 months,” he said.
Still, travel demand has remained resilient so far despite economic uncertainty, a trend seen across Canadian airlines. Deluce says he remains optimistic about the 2024 demand environment.
“2023 was about building,” Deluce said.
“In 2024, you’ll see us broaden out our network from Toronto Pearson, Ottawa, Montreal and Halifax to practically all large major North American destinations. You’ll see continued strengthening of frequencies on existing markets we already serve, and a continued focus on the customer in everything we do.”
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.
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