Good afternoon, Mr. Chairman and members of the committee.
Thank you for the invitation to speak on behalf of Porter Airlines and our 1,500 team members.
I will begin by offering a brief overview of Porter’s business, which started in 2006 from Billy Bishop Toronto City Airport as part of an effort to revitalize this transportation asset for the city and country. I’m pleased to say that this has been largely successful, with Porter serving some 22 destinations in Canada and the U.S. as of the beginning of 2020, while operating a fleet of 29 made-in-Canada De Havilland Dash 8-400 aircraft.
As a smaller carrier, Porter contributes greatly to competition on the regional routes it serves. Historically, base airfare prices decrease by approximately 60% or more when Porter enters a market, many of those previously having been served by only one airline. This has been true as Porter started service across Ontario, Quebec and Atlantic Canada, with benefits accruing even to the busiest routes, such as Montreal-Toronto and Ottawa-Toronto.
At the outset of the COVID-19 pandemic, Porter determined that it was in the best interests of our team members, passengers and public health efforts to temporarily suspend operations. While we never imagined at the time that this would be the case, our planes are grounded today and will be for more than a year before operations restart. Currently, we are hopeful that some flights can resume in the first half of 2021, subject to the course of the pandemic and evolving travel restrictions.
Porter has maintained its temporary service suspension longer than other airlines that made similar decisions. While some carriers had low levels of traffic, allowing them to continue operating certain longer-haul flights and maintain minimal levels of service for the country, Porter has been acutely affected because of its regional network, downtown Toronto hub, business traffic focus and exposure to U.S. markets.
The committee has heard how devastating the pandemic has been for airlines, so I will not repeat this information during my statement. I will only emphasize the trauma this situation has caused for so many people in the wider travel industry, from those involved with hotels, attractions and restaurants to travel agencies, airports and taxi drivers. This, of course, includes approximately 90% of Porter team members on temporary layoff.
We want nothing more than an opportunity to begin recalling these workers so they can contribute to rebuilding our business and the wider economy. In this context, government financial assistance is genuinely welcome by airlines and other travel businesses. Ensuring that airlines like Porter, and others that are much smaller, are in a position to contribute to economic recovery, sustain regional connections and provide competition is a benefit to the entire country.
At the same time, we understand that assistance is not a blank cheque. Porter is open to considering conditions being attached to any money made available to airlines by the government, including a more comprehensive approach to passenger refunds. While the government has reasonably tried to balance the interests of passengers and airlines when it comes to refunds, the strain on everyone has become greater as the pandemic drags on. In Porter’s case, we estimate that additional refunds not already provided to our passengers amount to a fraction of 1% of what is outstanding among all airlines in Canada.
The timing of government assistance potentially becoming available at this stage of the crisis may ultimately prove to be beneficial as a means of boosting service levels and economic growth, just as we hope to see vaccines lead to diminishing restrictions on mobility this spring and summer. Smaller markets stand to benefit most immediately from this, with the possibility of routes being re-established and competitive alternatives returning. As this develops, we believe that there is also value in expanding the use of rapid testing at airports as part of a coordinated and comprehensive effort to promote safe travel and facilitate the reopening of the economy and borders.
Porter’s overarching interest regarding potential government assistance is that it be considered equitably. It is crucial that smaller airlines not be disadvantaged at the expense of supporting others with larger interests.
Thank you for your invitation to speak. I would be pleased to expand on any topic mentioned or otherwise of interest to you during the question period.