Air Transat and Porter have just announced plans to launch a joint venture, which sure has some interesting implications for Canadian aviation…
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Air Transat & Porter plan close partnership
In October 2022, Air Transat and Porter launched a codeshare agreement. The airlines now plan to take that cooperation to the next level, and want to launch a joint venture. The airlines claim that this will transform the current Canadian aviation landscape, by combining both airlines’ complementary networks.
For those not familiar with the two airlines:
- Air Transat is a Canadian leisure airline operating a fleet of 36 Airbus A320 and Airbus A330-family aircraft, with flights across the Atlantic and within the Americas
- Porter is a Canadian regional airline operating a fleet of 52 De Havilland Dash 8 Q400 and Embraer E195-E2 aircraft, exclusively within Canada and to the United States
So, what’s the intent of this alliance? According to the airlines, the goal is to expand service between North, Central, and South America, Europe, North Africa, Mexico, and the Caribbean, by integrating the complementary networks of Air Transat and Porter at both Toronto Pearson (YYZ) and Montreal Trudeau (YUL).
The goal is essentially to have a feeder network strategy, which will allow both airlines to expand in their respective markets — domestic and transborder short haul flights for Porter, and international medium and long haul flights for Air Transat.
With a joint venture, the two airlines would be able to coordinate their schedules and routes, to optimize connections. The goal is for this joint venture to be implemented throughout 2024.
Here’s how Annick Guérard, CEO of Air Transat, describes this partnership:
This historic agreement constitutes a significant step forward in executing Transat’s strategic plan and an important milestone in developing a more sustainable competitive network. We are delighted to further extend our collaboration with Porter, a partner that shares our customer-centric approach and values. Through this Alliance, we will accelerate the expansion of our transatlantic footprint by allowing us to leverage the domestic market served by Porter, while allowing for a more efficient use of our fleet.”
Meanwhile here’s how Michael Deluce, CEO of Porter, describes this partnership:
“Porter is in the midst of disrupting the North American market through a significant continental expansion that will only be amplified by this Alliance. The flow of passengers on both carriers means that Porter will be able to develop a more robust network by increasing flight frequency on key domestic and transborder routes, and entering into new markets with less point-to-point traffic. As we continue receiving deliveries of up to 100 new Embraer E195-E2 aircraft, our options for deploying this fleet are even greater based on this collaboration with Air Transat.”
My take on this expanded Air Transat & Porter partnership
Canada is an incredibly challenging aviation market, and the country has a lot of airlines. Canada is a huge country (marginally larger than the United States in terms of land mass) with only 40 million people. The country is highly seasonal, and the population is heavily concentrated in several major cities (roughly 13 million people live in the greater Toronto, Montreal, and Vancouver areas).
Despite that, Canada has an ever-growing number of airlines, serving virtually all market segments. We’ve seen a lot of attempted consolidation in Canada, but with mixed results. In 2019, it was announced that Air Canada intended to acquire Air Transat, though that ended up being called off, after the two airlines had issues with getting regulatory approval for the deal.
What’s my take on Air Transat and Porter trying to cooperate this closely? While their route networks are complementary, their business models are very different. Air Transat is an airline that competes on price and is pretty no frills, while Porter is an airline that offers free Wi-Fi, free drinks and snacks, etc.
If you ask me, this partnership isn’t exactly the perfect match in terms of business models. However, I suspect the airlines view it as better than nothing, since there’s value in partnering in order to fill seats, given the amount of competition there is.
I have to imagine that we’re going to see some more major changes in Canadian aviation in the next couple of years, as there are just so many players in the market…
Air Transat and Porter have announced plans to form a joint venture. The intent is that Porter will provide short haul feed for Air Transat’s long haul flights out of Toronto and Montreal. While the two airlines have complementary networks, they otherwise have very different business models.
This doesn’t seem like the perfect partnership in terms of how the airlines position themselves, though I guess it’s better than nothing, as the Canadian aviation market just keeps getting more and more competitive.
What do you make of this Air Transat & Porter joint venture?