If it seems that Canadian airlines are announcing or inaugurating new routes almost every day, it’s because they are. And while that’s great news for consumers as the increased competition helps drive down fares from unprecedented peaks at the tail end of the pandemic, as one industry observer stated at a travel event in Toronto this week: “It’s like the old days – there’s too much capacity out there.”

Beyond new routes and services, Canada’s aviation industry is transforming in unprecedented ways. WestJet has retrenched in Western Canada, abandoning some unprofitable routes in the east to Air Canada. The former, of course, has also brought Sunwing into its fold, which, with WestJet, creates a leisure giant, along with complementary tour operator divisions.

By the end of next year, Flair Airlines aims to increase its fleet to 26 planes from 21, and Lynx Air to 17 aircraft from its current nine. Porter Airlines plans to grow its fleet to 79 by 2025 from 46 currently. Then there’s Canada Jetlines, which took flight in September, 2022, and recently introduced its own tour arm.

The latest high-profile development, announced this week, is a joint venture between Porter and Air Transat that will enable the two carriers look to expand their range of destinations, tap each other’s markets, and gear up for a battle for an increased share of the country’s air market.

For Toronto-based Porter, the deal will open the gate to Europe and the sunny southern getaways currently being served by Air Transat. Meanwhile, the Montreal-based airline, which largely operates tour package trips, can benefit from access to Porter’s rapidly growing network in Canada and the United States.

Announced Tuesday, the “alliance” allows the carriers to co-ordinate pricing and schedules along with revenue sharing, and builds on a year-old code-share agreement that enables airlines to sell one another’s flights to their own customers. Air Transat said the prior arrangement increased its traveller tally by 60,000 this year.

“Porter is in the midst of disrupting the North American market through a significant continental expansion that will only be amplified by this alliance,” CEO Michael Deluce said in a release, while Annick Guerard, chief executive of Transat A.T., which owns Air Transat, said the joint venture will shore up its transatlantic presence “by allowing us to leverage the domestic market served by Porter.”

“We will be able to better connect our schedules to facilitate stopovers for passengers,” she added. “That’s not something we could do with the code-share agreement. The price will be more competitive, too.”

In another sign of Transat’s innovative growth plans, the airline recently announced direct flights to Morrocco, reminding of its historic penchant for introducing perhaps unexpected destinations like Croatia and Peru, or, in the past, Panama and Turkey.

Overall, the joint Transat-Porter venture will boost the former’s 60 destinations abroad and the latter’s 30 in Canada and the US to a combined 80 (each) with the partners compensated based on their portion of the journey.

The new arrangement also ratchets up pressure on Air Canada, which could feel the pinch on its US-bound routes as well as flights that funnel American passengers through Canadian airports enroute to Europe.

“Transat gets a domestic partner to grow transatlantic leisure flights, which compete directly with Air Canada Rouge,” noted RBC Dominion Securities analyst Walter Spracklin. “Overall, we see the joint venture putting further pressure on prices as the competitive landscape intensifies in domestic and transatlantic travel.”

Transat expects Porter connecting flights will account for between and 15 and 18% of its customers – a feeder system that attracts passengers to Porter as well.

The agreement would also allow Porter’s loyalty program members to put their points toward Transat flights.

Ultimately, the commercial agreement seeks to broaden both airlines’ reach.

“Carriers need critical mass,” said John Gradek, who teaches aviation management at McGill University, adding that smaller players face stronger headwinds. “This leaves Flair and Lynx to duke it out to see who stays in the Canadian marketplace.”

The Porter-Transat challenge to Air Canada could be tough too, due to the carrier’s scale and deep pockets.

“I would not want to be competing in big hubs against the big airlines,” said David Neeleman, who co-founded WestJet and JetBlue and currently runs Utah-based Breeze Airways.