New Airline Rivalries: Air Canada Vs. Porter, WestJet vs. Flair

MONTREAL — On a warm Wednesday this month, a cartoon raccoon raised a cocktail glass and sarcastically saluted Air Canada.

The social media image, posted by Porter Airlines, included an accompanying toast from the character: “Air Canada has now joined Porter in offering free beer, wine and snacks to all passengers. Thank you for joining our mission to help everyone truly enjoy the economy!”

With tongue firmly in cheek, the post went on to ask Canada’s largest airline, “What’s next, a raccoon mascot?”

The online contest marked the latest example of publicly calling out competitors — a recent trend amid a transforming airline market in which companies are stepping on each other’s wingtips in new ways and on a larger scale.

In a country traditionally dominated by two national airlines, a new set of aviation rivalries has emerged. Porter is increasingly moving into Air Canada’s Central Canada territory as well as trans-national routes as WestJet tries to counter the threat of Flair Airlines in a shift from the decades-old industry dynamic of fighting between the larger two carriers.

Porter, once a regional player hovering around the Toronto-Ottawa-Montreal triangle, has tripled its domestic market share to nearly 10% in the past 18 months. Turboprop aircraft were used when the carrier only covered short distances. It now has 35 Embraer jets in its fleet and expects 40 more by 2027, up from zero last January.

The rapid expansion largely overlaps with Air Canada’s territory in Ontario and Quebec, prompting the country’s largest airline to serve up free treats and drinks. Also, cocktails are now $5 per glass, down from $9. Porter has long promoted similar deals.

“It shows that they’re concerned about growing our market share and what we’re doing and that we’re a real competitive threat to them,” Porter President Kevin Jackson said in a telephone interview.

“How can I prove this? They haven’t released free beer and wine in Mexico and the Caribbean. We don’t fly there yet.”

Air Canada said it is continually improving its in-flight products. “We take all competition seriously,” spokesman Peter Fitzpatrick said in an email.

Flair and WestJet have also raised their hackles as the two battle it out for market share.

Flair now has a fleet of 20 planes — still a fraction of WestJet’s 180 planes, but enough to demand a response from the older of Alberta’s two airlines.

In an attempt to attract more price-sensitive customers — Flair’s main demographic — earlier this month, WestJet replaced its basic ticket tier with a new fare category that eliminated a free carry-on bag and other perks on which travelers once took for granted. Customers who choose the “ultra-basic” option must pay to choose a seat even when they check-in. They are also the last to board – despite being relegated to the back of the plane.

Flair joined the ad that Canadians delivered online by retweeting a post on X, formerly known as Twitter, from satirical news site The Beaverton: “WestJet announces SuperUltraBasic fare where customers stay at home and give them money” .

“Don’t be ultra basic. Fly Flair,” the budget airline offering an almost identical fare tier, posted a day earlier.

But WestJet may have the last laugh. In its first week, the fare class exceeded expectations with more than 100,000 tickets sold, the company said.

John Gradek, who teaches aviation management at McGill University, said WestJet’s move marks a competitive push against a growing rival.

“I’m basically taking Flair head-to-head,” he said.

Flair stepped in to fill the void left by Air Canada when it withdrew from dozens of regional routes west of Ontario during the COVID-19 pandemic.

Meanwhile, Calgary-based WestJet has cut routes in Ontario, Quebec and Atlantic Canada to refocus on its western territory. On Toronto-Montreal, it has gone from about 370 flights a month two years ago to none, according to figures from aviation data company Cirium.

WestJet pulled back in the east and dug further west “instead of going head-to-head with Air Canada in many markets,” said Helane Becker, an aviation analyst at TD Cowen. “They were strong there,” she said, referring to British Columbia and the Prairies.

Montreal-based Air Canada has mirrored the move, staying in central and eastern Canada while scaling back in the west. With Porter’s rise, it replaced WestJet as Air Canada’s biggest rival on routes such as Toronto-Halifax, Toronto-Fredericton and Montreal-Moncton, NB.

The fresh dynamism of the airline world doesn’t necessarily mean more competition, especially in regional travel.

Lynx Air and Swoop are gone – and Sunwing Airlines is set to enter WestJet’s mainline operation next year. As surviving airlines set their sights on more lucrative markets overseas and ditch smaller planes in favor of higher-volume travel, the number of flights on many short-haul routes has declined over the past five years.

Domestic capacity will likely decline this year compared to 2023, Becker said. Partly as a result, prices continue to rise. Air fares rose nearly five percent year-on-year last month, according to the latest Consumer Price Index report.

WestJet and Air Canada remain rivals, as do Porter and WestJet, with all four competing for traffic between Toronto and Vancouver, as well as travel to Florida, among other places. But the lines on the competition map have been redrawn.

“All carriers are competitors, including the US carriers … but the airline with which we overlap the most, of course, is Air Canada,” Porter’s Jackson said.

“We’re stealing market share.”

This report by The Canadian Press was first published on June 30, 2024.

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Christopher Reynolds, Canadian Press