The island location of Toronto’s Billy Bishop Airport makes it a city centre airport. Credit: Ports of Toronto.

New regional Canada-US airline Connect Airlines could be in line for significant investment from a “major US airline,” according to correspondence between the company and the US Department of Transport (USDOT). 

The letter explained how a memorandum of understanding (MoU) could transform the commercial relationship into an equity investment, depending on the results of Connect’s next funding round. 

Go deeper with GlobalData

Data Insights

The gold standard of business intelligence.

Find out more

Related Company Profiles

View all

While the identity of the partner was not disclosed in the letter itself, there are hints the major player is American Airlines (AA). 

In August 2021, company filings named AA as a partner and codeshare with the Toronto-based regional carrier. 

While Connect is still waiting on FAA approval via its air operators certificate, no formal deal can be signed to codeshare or set up joint operations. 

Why it matters 

AA is the major US airline without a Canadian partner. Delta Air Lines codeshares with WestJet, and United Airlines has a joint venture with Air Canada.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

This potential deal will not cause a major disruption to key international airports such as LAX or New York JFK. Connect aims to offer flights from Toronto’s Billy Bishop Airport (CYTZ) to cities such as Chicago and Philadelphia, where AA keeps its hubs. 

Billy Bishop itself offers unique opportunities for Connect and AA – as a small island-located airport, it is only fit for turboprop aircraft. As such, no major US airline or subsidiary currently flies to CYTZ. 

The detail

Once Connect receives FAA certification, it said it aims to raise $40m in a Series B equity round. While it has the paperwork to operate charter flights, it must convert this certification for scheduled commercial flights. 

Connect stated in its communication with the USDOT, it said a “major US airline will become a shareholder in Connect with the stated intention of taking a larger position over the next three years”.

This fits AA’s business strategy, as it currently holds stakes in partner airlines, including Envoy, Piedmont Airlines, PSA Airlines, JetSmart and Gol. 

AA’s chief revenue officer Vasu Raja said in 2022: “These partnerships are a means of being able to generate a massive amount of customer value… If we can create the biggest network for customers, everything kind of clicks into place from there.”