Porter Airlines CEO says expansion is on track, predicts ‘we’ll really elevate competition’
Porter Airlines Inc. chief executive Michael Deluce said the company’s expansion plans are on track despite a terrible couple of years for the travel industry, and predicted Porter will be doing its part to offset inflationary pressures by stoking increased competition by the end of the year.
“At the end of the day, I think we’ll really elevate competition,” Deluce said in an interview with the Financial Post’s Larysa Harapyn. “Consumers (will) have more choice and ultimately lower fares.”
Last summer, Porter announced that it intended to purchase 80 Embraer E195-E2 planes for about US$6 billion and hire roughly 6,000 people to mount a stiffer challenge to rivals such as Air Canada and WestJet on North American and Caribbean routes departing from Toronto, Ottawa, Montreal, and Halifax. Deluce said that he’s in the “later stages” of executing on his ambition, adding that regulatory approvals were close to being completed. He predicted Porter would start putting additional planes in the air in the third and fourth quarters. “We are hiring a lot of team members,” he said.
Consumers would benefit from discounts, as inflation has surged to the fastest in four decades. Transportation costs increased 14.6 per cent in May from a year earlier, Statistics Canada said in its latest monthly update of its consumer price index. There’s also an unprecedented number of job vacancies, as companies have struggled to find enough workers to keep up with pent-up demand.
“A lot of the market dynamics right now are likely transitionary,” Deluce said. “Fuel prices are skyrocketing. There’s inflation throughout the system. A lot of this is the unwinding of a couple of years of hibernation,” he continued. “We’ve seen very, very strong pent-up demand for leisure travel that’s far in excess of our pre-COVID levels, but business travel has been slow to return.”
Overall, Deluce said he expects Porter “will move roughly the same number of passengers” this year as in 2019.
Strong demand and labour shortages have combined to create serious disruptions at some of Canada’s biggest airports as summer vacations begin. Deluce said Porter has avoided most of the chaos because it relies on Billy Bishop Toronto City Airport, located on the Toronto Islands, instead of Toronto Pearson International Airport, which has been coping with unusually long lines.
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Toronto Pearson International Airport is Canada’s busiest airport, while Billy Bishop is ninth.
Operating at a full staffing level has also made a difference, Deluce said, adding that many of the issues that Pearson airport is currently facing are stemming from shortages of security and customs screenings, coupled with a lack of manpower at some of Canada’s larger carriers.
“They’re all sort of cascading into a more challenging operation,” Deluce said. “Again, we’ve been fortunate at Billy Bishop to largely be immune to some of those impacts.”
Deluce said the airline is not worried about pushback from the bigger airlines as he pushes more into their turf. “Everybody has their hands full right now,” he said, adding that Porter also has advantages in sustainability over the other airlines because its Embraer planes are the most environmentally friendly aircraft on the market. That could matter to flyers who are worried about the airline industry’s contribution to climate change.
“There are choices consumers can make between one airline and another, and the type of equipment they operate,” Deluce said. “There will be significant shifts over the next decade and certainly Porter will continue investing in the best aircraft available to minimize emissions.”
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