Porter's airline has perhaps the loftiest goals in Canadian skies: to compete with established industry players, not only trying to beat them at cost, but also winning the hearts of its passengers.
“It's a completely different way of traveling in economy and has allowed us to grow very rapidly over the last 18 months,” Porter CEO Michaela Deluca told Global News in an exclusive interview this week.
The Toronto-based airline emerged from the COVID-19 pandemic with ambitious growth plans, adding dozens of jets and destinations to its arsenal to rapidly scale its operations.
But given that other promising Canadian airlines regularly fail to add competition to a tightly focused industry, some experts say Porter may have a narrow start to success.
“The key is can they do it profitably and can they make it work? Because everyone is watching it now,” says Robert Kokonis, president of the consulting firm AirTrav Inc.
What sets Porter apart, Deluce said, is the passenger experience on the airline's planes.
Porter planes fly without a middle seat, have free Wi-Fi access on board and offer free alcoholic beverages.
Lesley Keyter runs the Travel Lady agency in Calgary, serving a primarily older clientele. She tells Global News that her customers like Porter because the lack of a middle seat is a boon for people with mobility issues, and serving drinks in real glassware adds a touch of class to the overall experience, harkening back to the early days of flying.
“Everyone is talking about it because this service is completely different than any other airline offering in Canada and North America,” Deluce says.
Porter Airlines CEO Michael Deluce stands in front of an E2 jet in the carrier's maintenance hangar at Pearson Airport.
Anne Gaviola / Global News
Internal customer satisfaction surveys rate the airline highly, Global News says, and its focus on hospitality appears to be bearing fruit on the regulatory side as well.
The Canadian Transportation Agency's latest customer complaint data ranks Porter lowest among its competitors.
According to the transport watchdog, Porter reported an average of 1.3 complaints per 100 flights from April 2023 to June 2024. During the same period, Air Canada and WestJet reported an average of about five complaints per 100 flights; The now-defunct Lynx Air topped the complaints list with a score of 18.9, while Edmonton-based Flair Airlines was second from the top with a score of 15.0.
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Porter's competitors also appear to be paying attention to the airline.
In June, Air Canada announced it would also offer free alcoholic beverages on its flights, while a month later WestJet said it would soon offer free Wi-Fi on some of its routes. (These moves didn't go unnoticed by Porter, each earning tongue-in-cheek praise from a rival airline on social media.)
Porter wants to compete not only on quality, but also on quantity. Over the past 18 months, Porter has added 36 North American destinations and launched 42 all-new single-aisle jets, and plans to increase the number of aircraft it operates to 100 aircraft in the coming years.
Deluce says Porter has hired an additional 2,500 employees over the past year and a half as part of an effort to scale up its operations and compete more directly with established large players, especially Air Canada, in the east.
Comparing this year's Thanksgiving weekend offerings to those in 2023, Porter's seating capacity increased by 37%, according to data shared with Global News by analytics firm Cirium. Despite the demise of Lynx in February and WestJet's acquisition of Swoop, overall flight capacity increased year over year on Thanksgiving, largely due to Porter's expansion.
Much of Porter's growth comes from its transportation hub, Billy Bishop Airport on Toronto Island. The airline got some clarity this week from Toronto city council, which voted to extend its airport lease for another two decades despite concerns from city government staff.
Next, Porter plans to build a new terminal at Montreal's Metropolitan Airport, near downtown, in an attempt to revitalize the area to become, in Deluce's words, “Billy Bishop on steroids.” This extension is scheduled to open in the second half of 2025.
Porter was one of the few to shut down operations entirely during the Covid-19 pandemic amid the collapse of the business travel industry that had previously been the airline's bread and butter.
But Deluce says the decision has paid off in the post-pandemic recovery as Canadians' appetite to travel has increased. Instead of “scrambling day by day,” the darkness during the pandemic provided Porter with “clarity of thought” that helped him chart a path out of the pandemic crisis while his competitors struggled to keep planes in the air.
Porter also secured a $270.5 million loan from the federal government in 2021 to finally help get planes back in the air and reimburse passengers for canceled flights. Meanwhile, aid for Air Canada worth up to $5.9 billion was approved, but WestJet did not continue its aid program.
“It allowed us to maintain our balance sheet and focus on the future,” Deluce says of the decision to close the business during the pandemic.
While Porter has been on the scene since 2006, its recent rapid growth puts it in a similar position to a startup airline, Kokonis notes.
Flying brand-new planes – not to mention the infrastructure investments the airline is making in Montreal – requires “intensive cash flow,” he says. Head-to-head competition with large, established industry players requires growth so fast as to reduce the market share of incumbents, Kokonis says.
WestJet and Air Canada together account for about 75 per cent of the total number of seats in Canadian skies, not to mention other competitors such as Flair Airlines. The level of competition in the airline industry and the impact on airfares and services for Canadians is currently under investigation by the Competition Bureau.
More competition, lower prices
Analysts who spoke to Global News say Porter's rapid growth has contributed to the overall decline in prices. More seats mean more competition between airlines, which could lead to more aggressive pricing on overlapping routes, experts say.
“Competition is good. It's good for our country. This is a great solution for travelers,” says Kokonis.
However, Canadian airports are metaphorically littered with the rusty hulls of countless aircraft carriers that have tried to rush the two large aircraft carriers, if not strip them of their seats, thus making room for a profitable airliner from a third country in Canada.
Taking into account variable fuel costs, airport fees and other costly inputs, the costs of running an airline can be “exorbitantly high,” Kokonis says.
“The reality is that for the airline industry, making money in the best of times is difficult,” he says.
To that end, Kokonis says the airline industry is keeping a close eye on Porter from an operational and financial standpoint to see if the carrier's “enhanced economics” model can deliver sustainable results at scale.
While he believes Porter is heading in the “right direction”, Kokonis believes the airline will need to keep capital flowing and not deviate from its core offering by trying to become a multi-faceted and multi-faceted airline too quickly.
“They need to make sure that they're growing at the rate necessary to compete with Air Canadas, but at the same time do it in a very careful way to make sure that they're not just here today, but they're going to be here tomorrow in five years,” he says.
While Deluce says Porter is “competitively priced,” the airline eschews the ultra-low-cost model that competitors like Flair and WestJet tend to gravitate toward as they try to maximize revenue per seat and per mile.
Porter's offer to scale up comes after years of high inflation and rising interest rates have left many Canadians feeling cash-strapped and scrambling for deals on plane tickets — if they travel at all.
“The market will decide whether having more flight options or better prices is what drives them to choose one airline over another,” says Jim Hetzel, managing director of Cirium.
For Porter's part, Deluce is confident that the airline can expand its flight offerings without sacrificing service quality. After years of flight disruptions and horror stories from the airline industry during the pandemic, he believes Porter's approach will benefit not only the company's customers but also the industry as a whole, as competitors also look to improve their service levels.
“It raises the level of every player's game,” he says.
