Porter, Air Transat launch joint venture to gird against domestic competition

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MONTREAL - Porter Airlines and Air Transat have announced a joint venture as the two carriers look to expand their range of destinations and tap into each other's markets.

For Toronto-based Porter, the deal will open the gate to Europe and sunny southern getaways currently being served by Air Transat. 

Meanwhile, the Montreal-based airline, which largely operates tour package trips, can benefit from access to Porter's rapidly growing network in Canada and the United States. 

Announced Tuesday, the joint venture allows the carriers to co-ordinate pricing and schedules along with revenue sharing, and builds on a year-old code-share agreement, which enables airlines to sell one another's flights to their own customers.

It also comes as competition ramps up on major domestic routes and sun destination flights, even amid uncertain travel demand. 

Porter Airlines plans to grow its fleet to 79 by 2025 from 46 currently. 

"Porter is in the midst of disrupting the North American market through a significant continental expansion that will only be amplified by this alliance,'' CEO Michael Deluce said in a release.

Annick Guerard, chief executive of Transat A.T., which owns Air Transat, said the arrangement will shore up its transatlantic presence "by allowing us to leverage the domestic market served by Porter.''

Transat in particular could use a boost. As of July 31, its net debt-to-adjusted earnings ratio sat at about 13 times, an exceptionally high figure. Its earnings before interest, taxation, depreciation and amortization were $115 million versus a net debt of $1.5 billion.

Nonetheless, in its third quarter, the 36-year-old company turned a profit for the first time since 2019, netting $57 million.