Behind Porter’s Scrappy Fight to Save the Airline
Few airlines exist around the world left unscathed by the coronavirus pandemic, with most drastically slashing schedules and operations, but few have gone into hibernation. That’s what Canada’s Porter Airlines has done, grounding its flights on March 21 last year and now extending its shutdown till May 19.
The carrier, based in Toronto’s Billy Bishop Airport, blamed continued travel restrictions for the latest delay. In January, Porter delayed its restart to March, but has said U.S.-Canada border restrictions, internal travel bans, and a resurgent virus are not enough to offset the pace of vaccination, at least for now. The carrier also warned that the date may slip again.
But make no mistake, Porter is using this pause to work feverishly to ensure it returns in a healthy enough state to avoid future peril.
“We remain optimistic that things are moving in the right direction, but it is possible that this tentative date may also need to be modified if vaccinations don’t accelerate to enable the easing of travel restrictions,” Porter CEO Michael Deluce said in a statement.
Canada has adopted some of the strictest travel restrictions in the world, recently mandating 14-day quarantines in addition to proof of negative tests for all incoming passengers. This has stifled Canadian airlines’ recovery and is unnecessary, said the National Airline Council of Canada (NACC), which advocates for either testing or quarantines, but not both.
Porter operated a handful of routes to the U.S. before the pandemic. These routes are not slated to be among the first to restart, a spokesman said. Instead, Porter is targeting its high volume routes, Toronto-Ottawa and Toronto-Montreal, as the first to come back, he said. The rest of the network will be restored as demand returns and, in the case of the U.S. routes, when the border reopens.
Shortly after Porter ceased operations last year, the carrier laid off or furloughed 90 percent of its staff. These employees have been supported by the Canadian government’s unemployment insurance and emergency wage support programs. But the airline’s restart is contingent on its employees being up-to-date with their certifications and licenses. Porter is aiming to bring back enough employees to operate whatever routes it restarts four to six weeks before May 19, the spokesman said.
The company raised $107 million (CAD$135 million) early in the pandemic through the Export Development Bank of Canada, using part of its fleet as collateral. Porter owns its 29 Bombardier Q-400 turboprops, with only three of the fleet encumbered with debt before the pandemic, the Porter spokesman said.
Other than the loan guarantee through the Export Development Bank and wage support that the government extended to workers in all sectors, the Canadian airline industry has not received state aid. The government is said to be weighing a support package, but NACC said there is no clarity on when it may be approved or what it might cover. By contrast, the U.S. government has given airlines more than $60 billion with more proposed in the $1.9 trillion Covid-19 relief bill recently passed by the House of Representatives.
“Government financial assistance at this stage would be timely as a means of boosting service levels and economic growth during a recovery period, and adding stability for the airlines,” the Porter spokesman said.Subscribe Now to Airline Weekly