Michael Deluce, CEO of Porter Airlines, noted that, in his view, the market is too limited to sustain all airlines in Canada, and within the next two years, at least one of these companies will disappear.
It is worth highlighting that Porter is one of the airlines that is expanding the most. In fact, Deluce’s comments come just a day after the announcement of a strategic partnership with Alaska Airlines. Additionally, less than fifteen days ago, the company under his leadership announced its collaboration with Air Transat. Moreover, the Toronto-based company aims to expand its fleet to 79 aircraft by 2025. In the last year alone, the airline added 300 pilots to operate the 25 Embraer E195-E2 that have joined its fleet.
However, as national airlines increase their operations, there is a risk of increased competition, especially among ultra-low-cost carriers (ULCC). In this regard, Porter’s executive expressed skepticism about the viability of so many companies. «I don’t believe there’s room for the multitude of ULCCs in the market,» he emphasized during an interview. «I would say that not all of these plans will come to fruition,» he warned, without pointing to any specific company, regarding the expansion of airlines in the northern country.
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The Canadian market is experiencing a genuine boom post-pandemic. Flair Airlines plans to increase its fleet to 26 aircraft from 21. Lynx Air, to 17 from its current 9. Both airlines aspire to operate 50 aircraft in the next two or three years. Meanwhile, Canada Jetlines plans to have 15 aircraft in its fleet in the next 13 months, compared to its current 3. On the other hand, WestJet closed its subsidiary Swoop, merging it with its main operation, and plans to do the same with Sunwing Airlines.
This intensification of competition has pushed ticket prices down. In October 2023, fares were already 19 percent lower compared to the same month the previous year. This follows a year-on-year decrease of approximately 21 percent in September and 20 percent in August. To add fuel to the fire, business travel, a key market due to its high yield, continues to decline.
Jacques Roy, a professor of transportation management at HEC Montreal, pointed out that many North American markets are almost saturated. However, he emphasized that there is still room for expansion in transatlantic and transpacific flights. «Most of the growth we see comes from international flights and destinations. I don’t see a significant increase in the number of passengers within Canada,» stated the professor.
