Transat and Porter Airlines Seek Closer Ties to Fuel Growth Plans

29.11.2023 - 05:29 / skift.com / Air Canada / Edward Russell

It’s not a merger, but Air Transat and Porter Airlines plan a new joint venture that would allow the Canadian companies to join forces to grab a larger marketshare.

The pact unveiled Tuesday would allow Porter and Transat to coordinate routes, schedules, and fares across their networks. In short, it would allow the airlines to essentially merge their respective operations without the cost or hassle of actually combining. And, as Porter and Transat see it, it would enable future expansion while offering travelers “significant benefits,” including more flight options and easier connections.

Porter has orders for as many as 100 Embraer E195-E2s that it plans to fly on domestic Canada or U.S. routes.

Transat sees the tie up as a way to “accelerate the expansion of our transatlantic footprint,” said CEO Annick Guérard. The carrier doubled down on its core airline business and moved away from being an integrated travel company in 2021.

The tie up would also allow Porter and Transat to better compete with market leader Air Canada. The Star Alliance carrier dominates the Canadian market with a 41% share of domestic and international seats this year, Cirium Diio schedule data show. Air Canada is the leading airline at both Porter’s Toronto base and Transat’s Montreal base.

“This is an incredible opportunity that has the potential to transform the competitive landscape in Canada,” Porter CEO Michael Deluce said on LinkedIn. “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.”

Porter is Canada’s third-largest domestic airline by seats, with just over a 7% share this year, according to Cirium Diio. Transat, on the other hand, does not even rank in the top 10, with a less than 1% share. Including international seats, Transat jumps to the third spot with a nearly 5% share and Porter drops to fourth with a 4% share.

WestJet, Canada’s second-largest airline by seats, has shifted its focus to western Canada, and away from eastern Canada. That includes pulling out of the busy Montreal-Toronto route in October, and leaving an opening for competitors to fill.

Canada is also seeing a flurry of new budget competitors, including Flair Airlines, Canada Jetlines, and Lynx Air.

The Porter-Transat tie up comes amid a wave of airline consolidation, both in Canada and abroad. WestJet acquired leisure carrier Sunwing in May, and is in the process of integrating it into its own operations. WestJet also folded its budget subsidiary Swoop into its own operation in October. And Air Canada has fortified its leading market position with a new U.S. joint venture with United