A joint venture between Porter and Air Transat is a positive for the latter, says TD Securities.
On November 28, Air Transat (Air Transat Stock Quote, Chart, News, Analysts, Financials TSX:TRZ) announced a network sharing arrangement with Porter Airlines (Porter Holding International Stock Quote, Chart, News, Analysts, Financials Nasdaq:ULNV), expanding service domestically in Toronto and Montreal, and at various places worldwide.
“This historic agreement constitutes a significant step forward in executing Transat’s strategic plan and an important milestone in developing a more-sustainable competitive network,” said Transat CEO Annick Guerard. “We are delighted to further extend our collaboration with Porter, a partner that shares our customer-centric approach and values. Through this alliance, we will accelerate the expansion of our transatlantic footprint by allowing us to leverage the domestic market served by Porter, while allowing for a more-efficient use of our fleet.”
“Porter is in the midst of disrupting the North American market through a significant continental expansion that will only be amplified by this alliance,” Porter CEO Michael Deluce said. “The flow of passengers on both carriers means that Porter will be able to develop a more-robust network by increasing flight frequency on key domestic and transborder routes, and entering into new markets with less point-to-point traffic. As we continue receiving deliveries of up to 100 new Embraer E195-E2 aircraft, our options for deploying this fleet are even greater based on this collaboration with Air Transat.”
TD analyst Tim James says this is un unambiguous positive for TRZ.
“We believe that the combination of these two complementary brands will contribute to Transat’s financial results, without requiring significant investments,” he said in a research update to clients November 29.
At press time, shares of Air Transat were up 0.7 per cent to $3.07.