July 12, 2021

SAO PAULO (Reuters) -Porter Airlines is tapping opportunities from the COVID-19 pandemic with a firm order for 30 Embraer E195-E2 jets that will double the Canadian carrier’s fleet and allow it to add new routes in the United States, Mexico and the Caribbean, Chief Executive Michael Deluce said on Monday.

Earlier, Brazilian planemaker Embraer SA said Porter was the mystery buyer behind an order of up to 80 E195-E2 jets, a deal previously announced in May. Porter placed an order to buy a record 30 jets and options for 50 more, for a total value of $5.82 billion based on list prices, Embraer said.

Embraer shares were up 6% in early afternoon trade in Sao Paulo.

The order, Toronto-based Porter’s largest ever, is part of a reshaping of Canada’s post-pandemic air travel sector. Tiny ultra low cost carrier (ULCC) Flair Airlines is introducing cross-border service, raising pricing pressure as market leader Air Canada restores routes. [nL2N2OJ2MZ]

“It certainly will be highly competitive,” Deluce said in an interview.

Like their global peers, Canadian carriers were battered during the pandemic with flights plummeting due to strict travel restrictions. But the pandemic also led to growth opportunities, including lowering the cost of acquiring planes.

“The pandemic created opportunities on acquisition that were not available before,” Deluce said, without giving details on pricing. “We were looking at various growth plans, but I think the specifics really emerged during the pandemic.”

United Airlines in late June announced its largest-ever order for Boeing and Airbus jets in a push for post-pandemic growth.

Porter is restarting flights on Sept. 8 after suspending travel for nearly 18 months. The carrier operates 29 DeHavilland Dash 8-400 turboprops and competes by offering perks like free beverages and snacks, at a time when rivals are moving toward charging for onboard services.

But while the fuel-efficient turboprops help Porter lower costs, their limited range capped the airline’s growth potential.

The E195-E2 jets would allow Porter to fly to new U.S. Mexican and Caribbean destinations from Canadian cities like Toronto and Montreal, although new routes have not yet been announced. The jets will enter service starting in the second half of 2022.

Embraer has orders for up to 280 E195-E2 planes, a mix of firm orders and options.

Porter will be Embraer’s first North American customer for the E2 line.

(Reporting by Marcelo Rochabrun in Sao Paulo and Allison Lampert in MontrealEditing by Paul Simao)