Strategy Case Porter Airlines

Porter Airlines has experienced a continued success in the short-haul market based in Toronto Island Airport. Its low cost structure has enabled it to be proactive in the industry and gain a fairly large market share. This case analyses both external and internal contexts of Porter Airlines, discusses its key successful strategies, as well as identifies the problems that Porter faces and provides recommendations.

External Context

Air Canada dominates the Canadian aviation industry, which has lead to a lack of competition, keeping prices high for Canadian travellers, which is also true in the short-haul market out of Toronto. Prior to Porter’s entrance, only two carriers, namely Air Canada (Jazz) and WestJet, served most destinations within 500 nautical miles of Toronto, providing little competition and choices for customers.

Porter’s value proposition is based on “convenience, speed and service,” and it defined itself from the broader perspective of a “quality journey” in all of its dimensions. Since the hub of Porter Airlines, Toronto City Centre Airport, is located on the Toronto Islands, three kilometres south of downtown Toronto in Lake Ontario, it saves much time of travelling to and from Pearson (a hub for Air Canada and other competitors). About half of the time spent in long check-in lines and unpredictable security lines may also be saved. Moreover, Porter is competing on branding and level of service at the same time, while most airlines that are recently launched were competing on fare prices only.

Porter’s target customers are the time-sensitive frequent business travellers; these are typically high-yield passengers who prefer to book at the last minute and are willing to pay more for flexibility. They also prefer non-stop flight services to connections, which Porter has successfully provided. Porter Airlines could be considered as an innovator in the market through targeting on business travellers and has fair market share. It is notable that the...