O Canada: Smaller Canadian carriers see chance to seize US market share amid pandemic shake-up

Jul 21, 2021

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

The Canadian border will reopen to vaccinated American travelers on Aug. 9 for the first time since the start of the COVID-19 pandemic.

“With rising vaccination rates and fewer cases in Canada, we can begin to safely ease border measures,”  Canada’s Minister of Health Patty Hajdu said in a statement.

The U.S. border, meanwhile, remains largely closed to visitors.

The partial reopening creates some of the first good news for Canada’s struggling airline industry in more than two years.

As the border closed last spring and Canadian air traffic plummeted — falling to as few as 2,768 daily passengers at the country’s eight biggest airports in 2020, down from normal daily volumes of 160,000 to 180,000 in 2019 — the Canadian airline industry was thrown into disarray.

Want more airline-specific news? Sign up for TPG’s free new biweekly Aviation newsletter!

Even with a recovery underway and vaccination increasing in Canada, air passenger numbers have remained low. Each day in July has seen passenger counts at the eight major airports between 36,000 and 56,000, while in 2019 between 170,000 and 190,000 passengers could be expected on a normal day.

But in the eyes of two Canadian airlines, the near-collapse of air travel has created a new opportunity to grab a share of the lucrative Canada-U.S. air market.

Porter Airlines, a Canadian boutique carrier, plans to restart travel on Sept. 8 after almost 18 months on the ground due to the pandemic. Nine days later, the airline will resume service to destinations in the U.S., including Boston, Chicago, New York and Washington, D.C.

“While deciding to suspend our service was the most difficult business decision we’ve made, announcing a restart of flights is the first step in a recovery process that includes recalling hundreds of team members and welcoming back passengers,” CEO Michael Deluce said in a statement.

The carrier sees a unique opportunity to expand beyond its pre-pandemic network, which it operated with a fleet of 29 DeHavilland Dash 8-400 turboprop aircraft.

Last week, Porter announced it had placed a firm order for 30 Embraer E195-E2 aircraft. Porter will be the North American launch customer for the E2, the new generation of the Brazilian planemaker’s successful regional jet. The airline has an option for 50 more jets.

The order, which will double Porter’s fleet, will allow the airline to expand throughout the U.S., and potentially even to Mexico and the Caribbean. The first delivery is scheduled for the second half of 2022.

“This is a defining moment in Porter’s history,” Deluce said in a statement announcing the order. “Today we lay the foundation for a new and further reaching service for our customers.”

While Porter and Embraer did not reveal pricing, Deluce suggested that, like United Airlines with Boeing and Airbus, Porter was able to secure a favorable deal with Embraer as a result of the pandemic’s effect on the new aircraft market.

“The pandemic created opportunities on acquisition that were not available before,” Deluce told Reuters in an interview. “We were looking at various growth plans, but I think the specifics really emerged during the pandemic.”

Another small Canadian carrier, meanwhile, also sees an opportunity to grow as Canadian air travel returns.

More: Business travel is surging back sooner than expected, but there’s still some bad news for airlines

Flair Airlines, an ultra low-cost carrier based in Edmonton, Alberta, announced plans earlier this month to launch its own cross-border service into the United States.

Flair plans to begin U.S. flights on Oct. 31 with service to six cities: Fort Lauderdale (FLL), Orlando Sanford (SFB), Phoenix-Mesa (AZA), Hollywood Burbank (BUR), Palm Springs, California (PSP), and Las Vegas (LAS).

Although the airline is primarily targeting Canadian passengers looking to escape to warm weather destinations during winter, the airline will also be able to capitalize on American travelers venturing north.

The airline believes now, with the market in a state of relative flux, is an ideal time to launch the U.S. expansion, CEO Stephen Jones told TPG in an interview.

“We do think that there is a great opportunity,” Jones said. “As demand comes back, we expect that the price-sensitive leisure segment will be the strongest and earliest to return, and that’s really our core target market.”

Jones previously led European ultra low-cost carrier Wizz Air.

However, this won’t be Flair’s first effort to fly south of the border.

Flair tried to launch a U.S. gambit before under different leadership, but was unable to make money on the flights. It suspended many of the routes with short notice in early 2019.

But Jones thinks that this time will be different.

“We certainly took some lessons from the previous efforts of the company,” he said. “But this isn’t rocket science. It’s about flying people where they want to go. There’s an incredible demand. It’s all about execution.”

More: Delta will add 36 aircraft to fleet as it takes a different tack from United

The airline plans to compete strictly on price, undercutting established Air Canada and U.S. carriers.

With the border announcement, meanwhile, the legacy carriers are eager to reclaim the market they’ve held in the past.

Both United Airlines and Air Canada — which are both Star Alliance members — announced increased U.S.-Canada flights coinciding with the reopening.

So while Porter and Flair see an opportunity, the market will not be an easy one. Or as Deluce told Reuters: “It certainly will be highly competitive.”

Featured photo courtesy of Porter Airlines.

Delta SkyMiles® Platinum American Express Card

Earn 90,000 bonus miles after you spend $3,000 in purchases on your new Card in your first 3 months. Offer ends 8/3/2022.

With Status Boost™, earn 10,000 Medallion Qualification Miles (MQMs) after you spend $25,000 in purchases on your Card in a calendar year, up to two times per year getting you closer to Medallion Status. Earn 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants and at U.S. supermarkets and earn 1X Mile on all other eligible purchases. Terms Apply.

Apply Now
More Things to Know
  • Limited Time Offer: Earn 90,000 bonus miles after you spend $3,000 in purchases on your new Card in your first 3 months. Offer ends 8/3/2022.
  • Earn up to 20,000 Medallion® Qualification Miles (MQMs) with Status Boost® per year. After you spend $25,000 in purchases on your Card in a calendar year, you can earn 10,000 MQMs up to two times per year, getting you closer to Medallion® Status. MQMs are used to determine Medallion® Status and are different than miles you earn toward flights.
  • Earn 3X Miles on Delta purchases and purchases made directly with hotels.
  • Earn 2X Miles at restaurants worldwide including takeout and delivery in the U.S., and at U.S. supermarkets.
  • Earn 1X Miles on all other eligible purchases.
  • Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. Payment of the government imposed taxes and fees of no more than $80 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
  • Enjoy your first checked bag free on Delta flights.
  • Fee Credit for Global Entry or TSA PreCheck® after you apply through any Authorized Enrollment Provider. If approved for Global Entry, at no additional charge, you will receive access to TSA PreCheck.
  • Enjoy an exclusive rate of $39 per person per visit to enter the Delta Sky Club® for you and up to two guests when traveling on a Delta flight.
  • No Foreign Transaction Fees.
  • $250 Annual Fee.
  • Terms Apply.
  • See Rates & Fees
Regular APR
17.24%-26.24% Variable
Annual Fee
Balance Transfer Fee
Recommended Credit
Terms and restrictions apply. See rates & fees.

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.