First Porter flight takes off today after long hiatus,
First flight today, but experts expect turbulence from drop in business travel, vaccinations
It’s another sign that life is, ever so slowly, edging back to normal: Wednesday morning, a Porter Airlines flight will take off from Billy Bishop Toronto City Airport en route to Montreal.
After several fits and starts earlier during the COVID-19 pandemic, it will be the first time in almost a year and a half the airline will have one of its planes in the air.
“This is really the day we’ve all been waiting for,” Porter CEO Michael Deluce said in an interview Tuesday.
And while Porter is operating again and Canada’s borders opened up
Tuesday to almost any traveller who’s been double vaccinated, it’s not exactly business as usual — and it won’t be any time soon.
A recent report from DBRS Morningstar vice-president Valiant Ip predicted that worldwide travel levels won’t be returning to pre-COVID levels until 2025. The biggest culprits? The Delta variant, combined with sluggish vaccine rollouts around the globe.
“The industry continues to face significant headwinds with infection rates around the world soaring because of the highly contagious Delta variant, exacerbated by the uneven pace of the vaccine rollout,” Ip wrote.
The airline industry also faces another economic obstacle familiar to owners of downtown office towers: With so many people working from home, there isn’t nearly as much demand for business travel.
“Business travel will probably be the last segment to come back,” Deluce acknowledged. “I think over time, the need for in-person meetings and connectivity will not be gone, but it will certainly be one of the more challenging segments of the market to return to its full levels
that we saw prior to the pandemic.”
And those business travellers tend to pay more for their flights, too, accounting for 50 per cent of major carriers’ revenues despite being well under half of all travellers, according to industry estimates.
That’s one reason Porter announced earlier this year that it had signed a deal to buy up to 80 new planes from Brazil’s Embraer. The E-195 E2 will allow Porter to fly to destinations across North America and the Caribbean, boosting its reach with leisure customers, Deluce said.
The deal includes firm orders for 30 planes, along with an option for another 50. If the full 80 are delivered, the total purchase price is expected to be well over $5 billion (U.S.).
While acknowledging it’s an aggressive expansion at a time when the industry is reeling, Deluce argued that Porter is in solid financial position to make the move.
Part of that, he added, is because Porter fully owns the vast majority of its planes — something of a rarity in the capitalintensive airline industry.
“We went into the pandemic with a very strong balance sheet with only three aircraft which had debt associated with them. Out of our 29 aircraft, 26 of them were wholly owned,” Deluce said.
“A lot of carriers, including Air Canada, lost billions of dollars. Obviously, our financial plight over the last 18 months is nowhere near that. On a relative basis, we’ve been in a reasonable position.”
Still, the expansion is in the future. For now, Deluce says Porter will be taking a measured approach getting its existing routes and flights going again.
By the first week of October, the airline will be operating roughly 60 per cent of its preCOVID routes. That also means 60 per cent of its pre-COVID seats will be available; unlike some larger airlines which can swap out a bigger plane for a smaller one, Porter currently only has one kind of plane in its fleet, the De Havilland Dash-8 400.
In comparison, Air Canada says, it expects to have just 35 per cent of its pre-COVID capacity up and running by the third quarter of this year, but said that could change.
“We continue to dynamically adjust capacity and take other measures as required to account for public health guidelines, travel restrictions globally and passenger demand,” Air Canada spokesperson Peter Fitzpatrick said.
Deluce also said Porter has been able to watch and learn from its larger rivals’ less-thanperfect return to the air, and vows there won’t be a raft of cancellations or delays because of crew shortages. Simply put, they added some margin for any crew scheduling hiccups.
“Whatever we needed, based on the experience we saw at Air Canada and Westjet, we buffered, to ensure that we had the right staffing. So staffing won’t be an issue for us. And I think that’s really going to help us provide a significantly on-time product that people will like.”