Why American Airlines and Oneworld need Porter Airlines to join the alliance
The Oneworld airline alliance is the smallest alliance out of three global players (Star Alliance and SkyTeam being the other two) in terms of passengers and flights, with seemingly no growth amongst their current members and markets. Despite American Airlines being a founding member and the largest airline in the world, with a JetBlue partnership for the US Northeast, and Alaska Airlines recently joining the alliance, there is virtually zero Oneworld presence in Canada. While Canada doesn’t have a huge population (at around 40 million, it is just slightly more than the population of California…), it’s a very lucrative market for both business and leisure with four top 40 airports in terms of passengers in North America (Toronto, Vancouver, Montreal, Calgary), with the former two being large international gateways for Asia and Europe. This is a huge void in geographic coverage and route network for Oneworld since its inception in 1999.
Star Alliance and SkyTeam both have a strong presence in Canada
The concept of major global airline alliances began to take its modern shape in 1997 with the formation of Star Alliance. Canada has been dominated by Star Alliance since its creation as the country’s flag carrier, Air Canada, is a founding member. However, with the rise of WestJet as a formidable competitor in recent decades, this opened up an attractive target and avenue of penetration for another global alliance to jump in. This was exactly what Delta Air Lines and its SkyTeam did. Although WestJet is not officially a part of the SkyTeam alliance, it has had a codeshare agreement with Delta Air Lines since 2012, which means their tickets can be sold together to help connect passengers traveling between Canada and the US or transiting through to other countries. Furthermore, Delta and WestJet have entered into a strategic partnership in 2021 with reciprocal frequent flyer status benefits, and other synergies.
Since these two linkups, there has not been another sizeable or suitable competitor in Canada after Air Canada and WestJet that would draw any interest or have the kind of domestic and international route network for Oneworld to also join the party. The two airlines next in line in terms of size would be Sunwing and Air Transat. However, with both being leisure carriers, their business models cater more to Canadian vacation goers and thus lack the kind of flight frequencies and domestic route networks that would be most compatible with an airline alliance and its members.
Porter Airlines begin direct competition with Air Canada and WestJet across the country
Enter Porter Airlines in its new and upgraded 2023 form. For its entire existence since its founding in 2006 up until the end of 2022, it has been a small regional carrier based in Eastern Canada to destinations throughout the Canadian and US East Coast; exclusively operating the 70-seater De Havilland Canada Dash 8 (previously known as the Bombardier Q400) turboprop aircraft with a range limiting them to routes that are about two hours or less. Despite this, they’ve swiftly built up quite a strong network out of their hubs and focus cities in Eastern Canada and expanded their fleet to 29 of these regional aircrafts. Now, as of early 2023, they’ve taken a huge leap in their route network capability and capacity with the delivery of seven brand new Embraer E195-E2, the successor to the dominant regional jet-engine aircraft E-Jets, with a further 43 planes ordered for a total of 50 E195-E2s. These planes seat upwards of 130 passengers and provide the added range for longer transcontinental flights. This expansion is an extremely pivotal point for Porter as it effectively will triple its fleet size, and provide them with the capability to compete directly with Air Canada and WestJet on valuable transcontinental domestic routes such as Toronto-Vancouver, as well as destinations further into the US and Caribbeans.
Oneworld finally has a strong option to expand in Canada
This significant development should be music to American Airlines and Oneworld’s ears because there is finally a new and formidable competitor based in Canada. If Porter were to join the Oneworld alliance, it will instantly provide the connectivity and route network within Canada that the Oneworld alliance has never had previously. It will add a lot more connecting flight options within the alliance network that previously did not exist, such as a Toronto-Boston-Barcelona/Madrid route with Porter operating direct Toronto-Boston flights and then Boston-Barcelona/Madrid on Iberia. (Side note: I am very surprised and disappointed that neither JetBlue nor American have nonstop flight options between Toronto and Boston, two large metropolitan centers with 6 million and 5 million people, respectively. It’s an even bigger headscratcher when you dive deeper and find that JetBlue has the largest market share at Boston Logan Airport with 30%, and American tied for second with Delta at about 20%)
A win-win play for all Oneworld members and Porter Airlines
Many other Oneworld airline members will also benefit from the expanded Canadian domestic routes that Porter will bring to the team. Most notably, major international airlines such as British Airways and Japan Airlines with Trans-Atlantic and Trans-Pacifc flights from their hubs to select major Canadian cities will benefit from a potential increase in passenger demand; unlocking the domestic route network from Porter that connected large and mid-tier cities in Canada. For example, Japan Airlines currently operates direct flights between Tokyo Narita and one Canadian destination, Vancouver. Therefore, passengers in other large Canadian cities such as Toronto and Montreal are better off flying Air Canada and All Nippon Airways, both Star Alliance members. However, the addition of Porter and its new ability to fly all the major Canadian routes with their Embraer E195-E2, will unlock these 1-stop flights for Oneworld by connecting Toronto, Montreal, and other Canadian cities to Vancouver for this Japan Airlines flight. There are numerous instances of such synergies that Oneworld never had with the Canadian market. A couple of other examples that come to mind would be:
1. British Airways direct flights from/to Toronto, Vancouver, and Montreal to/from London with Porter Airlines feeding passengers into these three Canadian cities
2. Cathay Pacific direct flights from/to Toronto and Vancouver to/from Hong Kong with Porter Airlines feeding passengers into these two Canadian cities
As you can see, the possibility is quite endless and the increased connectivity in Canada can also open up more direct routes from Canada to other major cities where Oneworld members operate in. The opportunity here for Oneworld to get Porter into the alliance is just perfect and brings a lot of benefits to Oneworld to help keep up its pace and growth with the other two airline alliances. Similarly, Porter Airlines has a lot to benefit from in joining Oneworld as it unlocks new passengers and demand to their existing domestic routes who will be connecting to these long-haul international flights. This is a win-win partnership between the two parties and I hope we won’t need to wait long for this to come to fruition. Oneworld and American Airlines, late is still better than never, so time to finally put Canada on the map!
