Porter Airlines, EVP & CCO, Edmond Eldebs at the CAPA Airline Leader Summit Americas 2024

Transcript

Edmond Eldebs:Embraer has been very good to us. Yeah, I think Porter, prior to the American order, Porter was the largest and had the largest Embraer order coming out of the pandemic. We announced that we purchased an order for up to 80 Embraer originally, and then we've updated that order twice, and today We have an order for 100 jets. That order consists of 75 firm and 25 options. The aircraft is equipped with the Pratt Whitney engines that are also on the Airbus A321s that have the engine issues. We are experiencing some engine issues. Like, most of our airplanes are new. We've received the majority of them, all of them in fact, in the last 14 or 15 months. So we are seeing some engine issues. You know, one advantage we have is we're taking so many airplanes, we're taking so many deliveries so quickly. Last year we were taking 2 to 3 deliveries a month on average, and so the issues have certainly slowed down the growth a little bit, but we're able to react because we're taking delivery when we have an engine issue. You know, we're able to react. It gives us some flexibility to react with less passenger impact on the schedules. That was in 2023. We were taking 2 to 3 airplanes a month. This year, we'll take— they're coming in at different points in the year, but by the end of the year— so we started the year off with a fleet of 58 aircraft, and we'll end the year with about 74 or 75 aircraft total. That's both the Dash 8 and the jet. So the jet only, we started the year with 29 jets, and we'll end the year with plus 16, so 50— sorry, 46 jets. The markets are doing well, so we've expanded from our hubs out of the east, so Pearson, Ottawa, Montreal, expanded across North America to west, starting with Western Canada, so Vancouver, Calgary, Edmonton from Pearson, Winnipeg, I'd say early results are very strong. We've had consistently high load factors last year. We had a fantastic summer across Western Canada. And then late last winter, we— sorry, late last fall, we announced new markets into Florida. So we launched 5 markets in Florida in the fall. Those markets are Tampa, Fort Myers, Orlando, Fort Lauderdale, and— Orlando? Miami, and daily service to those markets been a tremendous success as well. I think in March we operated load factors in the high 80s across most of them. A couple of them I think were in the 90s. We also introduced new service from Ottawa to Florida as well, Fort Lauderdale and Orlando. That did tremendously well. So yeah, a lot of that growth is from in fact all of the growth from jets is from Pearson, Ottawa, and Montreal. Ottawa is a has been a great success for us so far. We've put a bit of capacity in there to Western Canada, and in fact this month, May, we become the largest carrier in departures and passengers out of Ottawa, surpassing Air Canada, so it's been a tremendous— tremendously successful hub for us. Montreal is another market that we're focused on building a network out of this year. This is in partnership with our codeshare partner Air Transat, where we are looking to connect our schedule and our network onwards to Europe, to their network. We actually received the okay from the Canadian regulators a few weeks ago, so we have the all-clear to move forward with our collaboration with Air Transat, and so we're in the process of doing that now. We do not need European regulators. Porter does not fly into Europe, and so yeah, it was the Canadian Competition Bureau that was a regulator here. The joint venture has us coordinating schedules, and in some cases having each partner price the O&Ds that are their strengths. So in the case of Porter, Porter will price the domestic Canada-US markets because that's where we operate. Transat will price the Canada to Europe markets. And so that was the crux of the approval. We have that approval now, so we can do that pricing collaboration immediately. On the case of the schedule coordination, that's, as soon as we got the regulatory okay, we started doing that. So now we're coordinating schedules in Montreal, and Pearson in, you know, in a much tighter, tighter manner. The domestic Canada market, there's been a lot of capacity added into that market over the last 12 months, a lot of that driven from Porter. So when we go back to the beginning of last year, Porter made up about 3.5% of the domestic seat share, and the data I saw this morning that you presented, Laurie, Porter today is 10.8% of that domestic seat share. share. So that was tremendous growth year over year. That will continue through end of this year. So what you're not seeing in that data is the markets that we are yet to announce this year and begin operating later. And, you know, based on the data that I've looked at, by the end of this year, we'll likely be over 14% of the Canadian domestic market. So that is a lot of capacity coming into the market in a short period of time across some large markets. And so I think for, you know, in the short term, the market The domestic market will continue to have a lot of capacity. The speed by which we're taking deliveries has us— we may take a delivery in 3 or 4 months that we won't announce the market we intend to operate for, and so what that does is if we have an engine issue today, we may have a plan to announce a market based on that aircraft coming in 3 or 4 months that we might delay announcing, and so that's what I mean by it's had less of an impact on our rollout. Publicly, you wouldn't see us slowing down our growth because we haven't announced certain markets, but if we do encounter an engine issue, the speed by which we're taking delivery gives us flexibility to sort of respond in that way. We're now about 15 months into some of the larger transcon markets like Vancouver, Calgary, and Edmonton from Pearson. I think it's still early. We're starting to see some reduced capacity, from some of the larger carriers, the 2 largest ones. Lynx coming out of the market a couple of months ago, they did operate quite a few of Porter's markets across the Transcon there, so we did see that seat share come out and we saw a short-term impact from that. I think overall Lynx only had about 9 aircraft, so it wasn't a lot of planes coming out of the system, but we did see a short-term benefit to that.

Copyright policy: All transcripts on this site are the copyright of CAPA - Centre for Aviation. Our reproduction policy is as follows: you may quote up to 400 words of any transcript on the condition that you attribute the transcript to CAPA - Centre for Aviation and link to the original video page. All other use is prohibited. While we aim for 100% accuracy in the transcript, there may be some minor transcribing errors.