Porter Airlines to buy up to 80 new planes in major expansion

Article content

Porter Airlines is taking advantage of the “chaos” created by the COVID-19 pandemic to buy up to 80 new aircraft and vastly expand its flight network across North America and into Mexico and the Caribbean, including plans to fly into and out of Toronto’s Pearson International Airport.

Article content

Michael Deluce, who took over as chief executive in April 2019, less than a year before the pandemic, said the disruption that cost large national airlines more than 90 per cent of their pre-pandemic traffic allowed Porter to make deals to acquire the newEmbraer E195-E2 aircraft at a good price, hire pilots, and find room in competitive airports.

“The pandemic and the crisis that really the entire industry has gone through over the past 15 months has really opened up substantial opportunities in our view to shift the competitive landscape,” he said in an interview.

Scaling up “would have been much more challenging in a pre-pandemic world,” he added.

The Toronto-based regional airline grounded its fleet in March of 2020 when the global pandemic was declared but will restart regional flights from Billy Bishop Toronto City Airport on Sept. 8. The expanded flights will begin in mid-2022.

Article content

Porter has made firm commitments to buy 30 planes, and has an option to purchase 50 additional aircraft. The total aircraft order is valued at up to US$5.82 billion at current list prices.

The purchase rights agreement includes a provision to convert to smaller E190-E2 aircraft, giving Porter the ability to introduce non-stop service in some markets where connecting flights are often the only option, and enable higher-frequency service for routes with greater demand.

The 15-year-old airline has offered service to and from the northeastern United States and east Canadian destinations including Ottawa, Montreal and Halifax, all within about 1,600 miles of Toronto.

Article content

Porter, which entered the pandemic with little debt, secured additional government credit to shore up the balance sheet and offset risk as it recovers and expands, but doesn’t plan to tap much of it, Deluce said.

On June 30, Porter Aviation Holdings Inc., parent company of Porter Airlines, announced it had reached an agreement with the federal government for loans of up to $270.5 million, including $20.5 million dedicated to passenger refunds for flights cancelled due to the pandemic.

Analysts have suggested it could take years for the airline industry to recover from the pandemic. Deluce said he believes a return to pre-pandemic flights levels is achievable by 2023 or 2024, with pent-up demand for leisure travel evident as vaccination rates grow and travel restrictions decline. Business travel will take longer to recover, he said, but he predicts it will come back to previous levels.

• Email: [email protected] | Twitter: BatPost