Christopher Katsarov/The Globe and Mail
Regional carrier Porter Aviation Holdings Inc. is buying as many as 80 Embraer jet aircraft for US$5.82-billion to expand its network across North America.
Porter plans to fly Embraer E195-E2 jets from Ottawa, Montreal, Halifax and Toronto Pearson airport to U.S., Mexican and Caribbean destinations, launching in the second half of 2022. The expansion will see Porter competing directly with Air Canada and WestJet Airlines Ltd.
“We are bringing Porter’s distinct style of service to dozens of new North American cities,” said president and chief executive Michael Deluce. “We believe that now is the right time to make this investment, as the pandemic resets the aviation landscape.”
The Brazilian-made E2 aircraft can carry 146 passengers. Porter has made firm commitments for 30 of the planes and has options to buy 50 additional jets, creating as many as 6,000 new jobs.
The carrier will continue to offer regional flights from Billy Bishop Toronto City Airport, near downtown Toronto, on De Havilland Dash 8-400 turboprop aircraft. Government regulations prevent jets from using Billy Bishop airport, and Mr. Deluce said the airline has no plans to fly Embraer planes from the facility.
Porter shut down all flights in March, 2020, due to the pandemic. The company plans to resume operations on Sept. 8. The federal government loaned Porter $270.5-million in June as part of a program to support the domestic airline industry. Mr. Deluce said that money will be used to restart the airline’s operations and refund passenger tickets.
The carrier plans to finance the Embraer jet purchase with funds from existing shareholders and aircraft sale and lease-back agreements, which are widely used in the airline industry. Porter is a private company with shareholders that include the Deluce family, pension plan OMERS, State Street Corp. and private equity funds Edgestone Capital Partners and Dancap Private Equity Inc.
This is the first North American order for São Paulo-based Embraer’s E2 line of aircraft. In 2013, Porter announced plans to acquire 30 Bombardier C Series jets, an aircraft now manufactured by Airbus SE. The order was subsequently cancelled, in part because Porter was not permitted to expand the Billy Bishop runway and fly jets from downtown Toronto.
Mr. Deluce said the decision to buy Embraer jets was based on the efficiency of the new E2 aircraft. The planes are 65-per-cent quieter than the previous generation of regional jets and their carbon emissions per seat are 25-per-cent lower.
“The E2 is the most modern and fuel-efficient aircraft in the world and offers passengers the Porter in-flight experience they expect,” Mr. Deluce said. The Embraer jet is configured with two seats on each side of the aisle so, as Mr. Deluce said, “no one ever faces the dreaded middle seat.”
About a third of the E2′s components come from Canadian manufacturers, including engines from Pratt & Whitney Canada in Quebec, avionics from the Thales Group in Ontario and landing gear from Alta Precision, a division of Quebec-based Héroux-Devtek Inc.
As pandemic travel restrictions ease, a number of airlines are expanding their networks. Last week, Edmonton-based discount carrier Flair Airlines launched flights to six U.S. vacation destinations, including Orlando, Las Vegas and Phoenix.
“This is a huge jump for [Porter],” said Addison Schonland of boutique aerospace consultancy AirInsight Group, adding that expanding to Pearson will pit the company more squarely against rivals.
“OK, you’re going to Pearson. That’s a big boy airport with all the other big boy competitors,” Mr. Schonland said. “How big is the Canadian market to enable Porter to survive against people like Flair, which is a low-cost operator, Air Canada, which is the giant in the room, and WestJet, which is a very clever operator?”
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