Porter Airlines’ ascent: Can the comfort carrier last in Canadian skies?

Porter Airlines has perhaps the loftiest goals in Canadian skies: compete with the sector’s established players, not solely by trying to beat them on cost, but by winning the hearts of its passengers.

“It’s a completely different way to travel in economy and it’s allowed us to grow very quickly over the last 18 months,” Porter CEO Michael Deluce told Global News in an exclusive interview this week.

The Toronto-based airline has emerged from the COVID-19 pandemic with ambitious growth plans, adding dozens of jets and destinations to its arsenal in a bid to rapidly scale up.

But with other promising Canadian airlines routinely coming up short in their bids to add competition to the tightly concentrated field, some experts say Porter could have a narrow runway to success.

“The key here is, can they do it profitably and can they make it work? Because everybody’s watching right now,” says Robert Kokonis, president of consultancy AirTrav Inc.

Porter’s differentiators, in Deluce’s own words, are the passenger experience within the airline’s jets.

Porter planes fly without a middle seat, have free on-board Wi-Fi access and offer complimentary alcoholic beverages.

Lesley Keyter runs the Travel Lady agency in Calgary, catering largely to an older clientele. She tells Global News that her customers are fond of Porter because the lack of a middle seat is a boon for those with mobility concerns, and serving drinks in real glassware adds a touch of class to the experience, harkening back to the early days of flying.

“Everyone is talking about it because the service is completely different than any other airline product in Canada and North America,” Deluce says.

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Internal customer satisfaction surveys rank the airline highly, he tells Global News, and a focus on hospitality also seems to bear fruit on the regulatory side.

The Canadian Transportation Agency’s most recent tracking of customer complaints ranks Porter at the lowest among its competitors.

Per 100 flights, Porter averaged 1.3 complaints from April 2023 through to June 2024, according to the transportation watchdog. Air Canada and WestJet averaged around five complaints per 100 flights in the same period; the now-defunct Lynx Air topped the list of gripes with 18.9, while Edmonton’s Flair Airlines was second from top at 15.0.

Porter’s competitors also appear to be taking notice of the airline.

In June, Air Canada announced it would also offer complimentary alcoholic beverages on its flights, while a month later WestJet said it would soon open up free Wi-Fi on some of its routes. (These moves did not escape Porter’s notice, each earning tongue-in-cheek kudos from the challenger airline on social media.)

Porter is looking to compete not only on quality, but also on quantity. In the past 18 months, Porter added 36 North American destinations to its offerings and deployed 42 brand-new narrow-body jets, with plans to scale up to 100 aircraft in the years ahead.

Deluce says Porter has hired an extra 2,500 staff in the past year and a half as part of its efforts to scale up and compete more directly with the established, large players, particularly Air Canada in the east.

Comparing this year’s Thanksgiving weekend offerings with 2023, Porter’s seat capacity is up 37 per cent, according to data shared with Global News from aviation analytics firm Cirium. Despite the collapse of Lynx in February and WestJet’s absorption of Swoop, overall flight capacity was up year over year over Thanksgiving, thanks largely to Porter’s expansion.

Much of Porter’s growth has come from its hub, Billy Bishop Airport on the island in Toronto. The airline received some clarity this week from Toronto city council, which voted to approve extending the airport’s lease arrangement for another two decades despite concerns from municipal staff.

Next, Porter plans to build a new terminal at Montreal Metropolitan Airport near the downtown core as part of a bid to revitalize the land into, in Deluce’s words, “Billy Bishop on steroids.” That expansion is set to open sometime in the second half of 2025.

Porter was one of a select few to shut down completely during the COVID-19 pandemic amid the collapse of business travel, previously the airline’s bread and butter.

But Deluce says that decision has paid off in the pandemic recovery as Canadians’ appetite for travel surged back. Rather than “scrambling day to day,” going dark during the pandemic gave the Porter the “clarity of thought” to chart a path out of the pandemic slump while its competitors struggled to keep planes in the air.

Porter also secured a $270.5-million loan from the federal government in 2021 to help eventually get its planes back into the air and refund passengers for cancelled flights. Air Canada was meanwhile approved for up to $5.9 billion in assistance, while WestJet did not move forward with the relief program.

“It allowed us to preserve our balance sheet and focus on the future,” Deluce says of the decision to shutter during the pandemic.

While Porter has been on the scene since 2006, the recent rapid expansion 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 — is a “cash flow-intensive” endeavour, he says. Competing head-to-head with the big, established players in the industry does require that level of rapid scale-up to make a dent in the incumbents’ market share, Kokonis says.

Together, WestJet and Air Canada account for roughly 75 per cent of the seat capacity in Canadian skies, not to mention other challengers like Flair Airlines. The level of competition in the airline industry, and the impact on airfare and services for Canadians, is currently the subject of a probe from the Competition Bureau.

Analysts who spoke to Global News say the Porter’s rapid ascent has helped to drive down prices across the board. More seats means more competition between airlines, experts say, which can lead to more aggressive pricing on overlapping routes.

“Competition is good. It’s good for our country. It’s great for travellers,” Kokonis says.

But Canadian airfields are metaphorically littered with rusted-out fuselages from countless carriers that tried to take a run at, if not unseating the big two carriers, making space for a viable third national airliner in Canada.

Between variable fuel costs, airport fees and other pricey inputs, costs for running an airline can be “sky-high,” Kokonis says.

“The reality is, for the airline industry, it’s a tough business to make money in the best of times,” he says.

To that end, Kokonis says the airline industry is watching Porter carefully from an operational and a financial perspective, to see if the carrier’s “elevated economy” model can work sustainably at scale.

While he thinks Porter is heading in the “right direction,” Kokonis believes the airline will need to keep the capital flowing and not stray far from its core offerings in an attempt to become a go-everywhere, do-everything airline too quickly.

“They need to ensure they’re expanding at a rate they need to compete with the Air Canadas, but at the same time doing it in a very prudent fashion to ensure they’re not just here today, but they’re around tomorrow in five years from now,” he says.

While Deluce says Porter is “competitively priced,” the airline is eschewing the ultra-low-cost model that rivals such as Flair and WestJet have leaned towards in an attempt to maximize revenues per seat and per kilometre flown.

Porter’s bid to scale up comes after years of high inflation and rising interest rates have left many Canadians feeling strapped for cash and in search of deals on airfare — if they’re travelling at all.

“The marketplace will decide whether having more flight options or having better fares is what sways them to go with one airline versus another,” says Jim Hetzel, managing director at Cirium.

For Porter’s part, Deluce is confident that the airline can scale up its flight offerings without sacrificing the quality of service. After years of flight disruptions and nightmare stories stemming from the airline industry during the pandemic, he believes Porter’s approach will benefit not only its own customers, but also the entire sector as competitors seek to raise their service levels, too.

“It elevates everyone’s game,” he says.