What happens when the five-time winner of the Skytrax World’s Best Leisure Airline award joins forces with an airline that is shaking the foundations of economy air travel market in North America?
We’re about to find out.
The joint venture between Transat and Porter Airlines aims to create a third option in a market where Air Canada and WestJet are the dominant players. It’s not a merger, but the agreement unveiled last week will allow the carriers to coordinate routes, schedules, and fares across their networks.
Actual airline mergers are fraught with challenges, from the stresses of merging corporate cultures to the time, cost and uncertainty of the regulatory approval process. But the Transat/Porter plans will allow the partners to essentially merge their respective operations without the cost or hassle of actually combining.
On paper, it’s an ideal marriage. After three decades as a vertically integrated travel company, in 2021 Transat announced it would put a stronger emphasis on its airline component, with plans to grow its transatlantic footprint and expand more into Latin America. The carrier also maintains a strong presence in Canadian holiday destinations in Mexico, the Caribbean and Central America.
Since 2006, Porter has built a strong brand and significant domestic presence in Canada, along withoffering flights to key U.S. cities using Toronto’s Billy Bishop Island Airport and a fleet of Dash 8-400 turboprops.
The carrier took a huge step forward following the pandemic, when it placed 50 firm orders for 132-seat Brazilian Embraer E195-E2 jets, with options for 50 more. Last week it exercised 25 of those options, bringing its firm commitment to 75 aircraft.
During 2023, Porter has taken delivery of 24 Embraer planes, adding high-frequency routes within Canada and the U.S. at a rapid pace. Porter’s economy offering includes no middle seats, free WiFi and free beer and wine, setting it apart from competitors and creating a positive buzz.
The agreement between Transat and Porter largely expands flight options for passengers on non-competitive routes, which is why key joint venture elements connecting Porter’s domestic network to Air Transat’s European network will not require regulatory approval
Michael Deluce, Porter Airlines (Photo Credit: Michael Deluce, Porter Airlines)
“This is an incredible opportunity that has the potential to transform the competitive landscape in Canada,” Porter CEO Michael Deluce said when the deal was announced. “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.”
The airlines will begin to implement the pact next year, building on a codeshare agreement launched in 2022. Transat says that deal, signed before Porter’s big 2023 expansion, increased passenger numbers by more than 60,000 people in its 2023 fiscal year ended October 31.
When the joint venture is fully implemented, Transat estimates that 15-18% of all of its passengers could fly on a joint itinerary with Porter.
TravelPulse Canada spoke with Sebastian Ponce, Transat’s VP Network Planning and Alliances, to get a better idea of what the tie-up will mean for Canadian travellers and travel advisors.
“The beauty of this agreement is that two complementary airlines are creating alternatives for Canadian travellers. We’re planning to grow within the international market, in Europe and in Latin America. This pro-competitive agreement will accelerate our growth,” said Ponce.
Air Transat (Photo Credit: Air Transat)
The new deal goes “far beyond” a codeshare agreement, Ponce said. The two airlines will collaborate on route timing, frequency and pricing, and will share both revenue and risk on key routes.
Ponce says travellers and the travel advisors who book their flights will enjoy advantages including reduced layover times and more direct routes, simplified booking, greater itinerary choice and competitive prices.
“We’ve been working together for a little more than a year and we’re very happy about the results,” Ponce told TravelPulse Canada. “We both have an entrepreneurial mindset and our shared focus on the customer experience makes us a natural fit. We are really happy to have the right partner.”
Ponce says the joint venture with Porter gives both airlines the ability to focus on what they do best.
“People deserve an alternative. Transat and Porter joining forces will help the whole industry. We will create the most of the synergies of the two brands. The joint venture tackles that in a very elegant way, without having to create a new entity. We think all the ingredients to success are here.”
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