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European Business TAP Portugal to offer direct flights between Toronto and Lisbon in bid to supplant transatlantic competition

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The thick flock of airplanes crossing the North Atlantic daily doesn't appear to worry TAP Portugal.

The national airline of Portugal will begin offering flights between Toronto and Lisbon five times a week in June, betting in part that Lisbon's proximity to North America will help it siphon off some of the passengers who now travel to Portugal via London or other major European hubs.

"Lisbon is a convenient place to connect in Europe," Carlos Paneiro, the company's vice-president of sales for North and Central America, said during a visit to Toronto. "It's not as crowded as Heathrow [London] or Charles de Gaulle [Paris]. It's not huge, so it's one more asset we have in order to convince Canadians to choose TAP."

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Restoring service to Toronto, a destination abandoned during the mid-1990s, comes following a series of transactions that has turned the former wholly-owned government airline into one with shared ownership.

Private-sector investors now own about 45 per cent of the airline. A group led by industry entrepreneur David Neeleman, who founded discount carrier JetBlue, Azul of Brazil and was one of the co-founders of WestJet Airlines Ltd., controls that stake.

While TAP is not a low-cost carrier in line with Mr. Neeleman's earlier models, it is starting off by challenging Air Canada's Rouge and Air Transat on price.

Economy-class tickets will cost $513, compared with more than $900 for Rouge and Transat's seat sale price of $704 for the week of June 19. TAP flights start June 10.

"We are in the market not just to compete with those flying directly to Portugal but also the ones that are flying directly to all Europe," Mr. Paneiro said.

The airline will launch an advertising campaign in April in Portugal and elsewhere in Europe to try to stimulate demand westward across the Atlantic Ocean, said Paula Canada, head of marketing and customer care.

The carrier also hopes its direct flights will encourage conference and convention business in Lisbon, Ms. Canada said.

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The number of flights and seats available across the North Atlantic has grown substantially in recent years, driven in part by WestJet's move into wide-bodied flights from several Canadian cities to London's Gatwick airport, and the expansion of Rouge to more European destinations. Many of those destinations were not profitable under mainline Air Canada service but are under Rouge's low-cost formula.

Another, smaller layer of competition was added this week when BH Air of Bulgaria said it will start twice-weekly flights between Toronto and its capital, Sofia, this summer.

Air Canada will make sure Rouge is competitive against TAP and others, although TAP is a partner with Air Canada in the Star Alliance network, industry consultant Robert Kokonis said. Mr. Kokinis is also the president of Toronto-based AirTrav Inc.

"How far to drop before you start losing money, that's kind of the key question," Mr. Kokonis said.

WestJet is actually scaling back its transatlantic service this summer by reducing flights to Gatwick from Edmonton and Winnipeg, industry analyst Ben Cherniavsky, who follows the industry for investment firm Raymond James Ltd., wrote in a recent report.

Mr. Cherniavsky pointed out how Air Canada has been going in the opposite direction with "gargantuan capacity growth" it added to Europe in the third quarter of 2016. Air Canada's available seat miles soared by 28 per cent.

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