Porter Airlines

Porter Airlines
Porter Airlines
IATA
PD		 ICAO
POE		 Callsign
PORTER
Founded February 2, 2006
Commenced operations October 23, 2006
Operating bases Billy Bishop Toronto City Airport
Focus cities Ottawa Macdonald-Cartier International Airport
Halifax Stanfield International Airport
Montréal-Pierre Elliott Trudeau International Airport
Frequent-flyer program VIPorter
Airport lounge Porter Airlines Lounge
Alliance None
Fleet size 24 (+2 orders)
Destinations 18
Parent company Porter Aviation Holdings Inc.
Headquarters Toronto, Ontario
Key people Robert Deluce (CEO/President)
Donald J. Carty (Chairman)
Website www.flyporter.com

Porter Airlines is a regional airline headquartered at Billy Bishop Toronto City Airport on the Toronto Islands in Toronto, Ontario, Canada.[1] Porter operates regularly scheduled flights between Toronto and locations in Canada and the United States using Canadian-built Bombardier Dash-8 Q 400 turboprop aircraft.

Porter's operation at the Toronto airport was launched in 2006 after some controversy. A planned bridge to the airport was cancelled in 2003, leading to lawsuits between the airline and the City of Toronto. The airline bought the island airport terminal and evicted rival airline Air Canada Jazz from the airport. Despite opposition from nearby community groups, Porter has expanded its operations since 2006, adding more destinations and planes. Porter opened a new, larger, passenger terminal at the island airport in March 2010. In 2008, Porter received a 4-star Skytrax rating, the only Canadian airline to do so.[2]

Contents

Organization

Porter Airlines along with Porter FBO Limited, which operates the Porter facilities at Billy Bishop, and City Centre Terminal Corp., are owned by Porter Aviation Holdings (PAHL) formerly known as REGCO Holdings Inc. The company was founded in 1999.

Porter Aviation Holdings Inc. is controlled by :

  • Robert Deluce (whose brother Peter Deluce ran Canada 3000 until its demise in late 2001)
  • Larry Tanenbaum – part owner of Maple Leaf Sports and Entertainment
Principal executives
  • Robert J. Deluce is President and CEO of Porter Airlines and Porter Aviation Holdings Inc. He was an executive with Air Ontario and other airlines. His salary is $204,167 for 2010.
  • Michael Deluce, Robert's son, is the Chief Commercial Officer of Porter Airlines. His salary is $145,833 for 2010.[3]
  • Donald J. Carty, a former American Airlines chief executive, is Chairman of the Board of Directors. Carty is also Vice Chairman and CFO at Dell Inc.
Investors

At startup, $125 million CAD was put into the airline including money from:

  • EdgeStone Capital Partners
  • Borealis Infrastructure – the investment arm of the Ontario Municipal Employees Retirement System (OMERS).

As of 2009, Porter's institutional investors include EdgeStone Capital Partners, Borealis Infrastructure, GE Asset Management Incorporated and Dancap Private Equity Inc.[4]

The then REGCO Holdings purchased the Toronto island airport assets of City Centre Aviation Ltd in 2005. This included the terminal used by Air Canada's Jazz airline, which at the time operated daily flights to Ottawa from the airport. On February 15, 2006, Air Canada had announced that its contract to operate its Jazz Airline service out of the REGCO terminal at the airport had been terminated. On February 27, 2006, REGCO was able to evict Air Canada Jazz from the publicly owned airport. Air Canada took the case to court, but lost an Ontario Superior Court ruling. REGCO's fully owned subsidiary 'City Centre Aviation' (now Porter FBO) then commenced renovations of the terminal building to serve Porter Airlines, which started flights in October 2006. Porter FBO continues to operate the terminal today, along with fuel and other services.

A new subsidiary, City Centre Terminal Corp., was set up in 2009 to manage Porter's new terminal at the Toronto island airport. The new terminal's cost of construction is estimated at $50 million CAD.[5] The first half of the new terminal opened on March 7, 2010.[6] The terminal will be completed in early 2011. When complete, the new terminal will have ten gates, two lounges, check-in and security areas, a duty free shop and food outlets. Porter is interested in locating a US Customs pre-clearance facility in the terminal.

The airline's mascot is a stylised raccoon named "Mr. Porter".[7] The raccoon appears in Porter newspaper ads. Porter also advertises on radio, using an announcer. The design of staff uniforms is based on 1960s standards of airline fashion. Porter has 933 employees as of March 31, 2010.[3]

Porter was initially organized as a private company. On April 16, 2010, Porter Aviation Holdings announced they were going to be listed as a publicly traded company. The company filed a preliminary prospectus — a business plan — with securities commissions across the country, a requirement before it can offer shares.[8] The company has $306 million of debt and leases and intended to raise $120 million of new shares in the company and order seven new Q400 planes.[9] However, after twice delaying the final deadline for the offering, and lowering its share price from between $6 and $7 per share to $5.50, Porter cancelled the initial public offering. According to Robert Deluce "We came to the conclusion that it was really prudent to defer the offering at this time and to wait until better market conditions existed. We wanted to raise some capital. We thought the IPO was the way to go, but we weren't prepared in any way to sell our stock at just any price."[10]

The media had openly speculated on the profitability of Porter as being a money-losing operation, as would be typical of a start-up. CEO Deluce had been asked by the media to provide information on the financial status of Porter, but declined. In its prospectus, the company outlined a loss of $4.6 million on revenues of $151 million for 2009. To be profitable, the airline needs to be filling 49.3% of its seats with paying customers. In 2009, the airline filled 41% of its seats, and in the first quarter of 2010, it filled 47%. Overall, the airline carried 900,000 passengers in 2009, 800,000 through Toronto island airport.[9] As part of disclosure for its public offering, Porter disclosed that from its startup in 2006 until May 2010, Porter lost $44.5 million.[3]

History

Billy Bishop Toronto City Airport viewed from CN Tower

Porter Airlines' launch was controversial. In 2002, the 'Toronto City Centre Airport', or 'Island Airport', operated by the Toronto Port Authority (TPA) was losing $1 million per year.[11] Only Air Canada flew flights from the airport as part of its "Jazz" service, operating daily flights to Ottawa after the closure of the 'City Express' regional airline.

In October 2002, the TPA announced a $35 million plan of improvements to the airport to support expanding its usage. The TPA planned to build a $15 million bridge and a $20 million airport terminal. A new regional airline would be launched at the airport, to be run by Porter's CEO Deluce.[11] Since its opening, the airport, located on Toronto Island, has been accessible by passenger ferry only and the ferry-only access was seen as an obstacle to expansion. In a deal with the City of Toronto, the TPA's plans were approved by Toronto City Council in November 2002.

The TPA's plans were opposed by neighbouring residents and community associations who together formed the Community Air special interest group to fight the expansion. The expansion became a primary issue in the 2003 Toronto municipal election. Mayoral candidates Barbara Hall and John Tory supported the bridge and David Miller opposed it. Miller and a slate of like-minded candidates for council ran on a common platform, the centrepiece of which was to stop the bridge. After Miller was elected Mayor in November 2003, the new council voted to cancel the previous Council's decision, stopping the bridge project.

After the bridge was cancelled, Robert Deluce launched a $505 million lawsuit against the City of Toronto and later expanded it to the Canadian federal government.[12] After receiving an unspecified amount of compensation from the TPA to settle the suit, his company bought the airport building that Jazz was using at the airport and cancelled Jazz's lease on January 31, 2006. Two days later, on February 2, 2006, he announced that Porter Airlines, a regional airline operating locally built Bombardier turboprops would begin service in 2006, operating from the airport, initially on a Toronto-Ottawa route.[13] In a show of political support, the Porter press conference was staged at the Bombardier plant in suburban Toronto, where the airplanes are built, with support from Canadian Auto Workers leader Buzz Hargrove, who said it would create new employment opportunities in the region.[14] On the same day the TPA announced plans to improve ferry service to serve the new airline, buying a $4.5 million, 150-passenger ferry.[15]

Immediately, political opponents of the TPA, including Miller, City Council members, local community associations and local Members of Parliament Olivia Chow and Jack Layton expressed concern that the operation of a major airline from the island will cause increased noise and air pollution in the downtown core.[16]

Concerns raised include safety. The airport's main runway is 4,000 feet (1,200 m) long, 600 feet (180 m) shorter than Bombardier's specifications for a fully loaded Q400.[17] Porter solved this problem by fitting the planes for 70 passengers, less than the maximum load of 78 passengers. There are several cautions to pilots flying into the airport, including boat masts, a nearby wind turbine, and no-fly areas. The flight path into the airport requires the airplanes to fly an approach offset from the runway centre-line to avoid nearby hazards such as tall chimneys and buildings.[18]

Jazz filed a $11.5 million law-suit against the TPA and later, Porter, in the Ontario Superior Court in February 2006, alleging that the TPA signed contracts forcing Jazz out of the airport, causing a monopoly at the airport, and were anti-competitive. Jazz later filed a suit in Federal Court.[19] On October 20, 2009, Jazz formally dropped its suit in Ontario Court, but plans to continue its law-suit against Porter and the TPA in Federal Court. According to the announcement, Jazz dropped the matter in provincial court as the TPA is a federal agency, and the Airport is a federal facility. Damages in the federal case are not specified.[20] Porter filed a counter-claim to Jazz' lawsuit citing damages of $850 million, based on Jazz agreement with Air Canada, and Porter has not dropped its counter-claim.[20]

The airline's maiden flight took place on October 23, 2006 to Ottawa.[21] When flights began, airline passengers were at first blocked by protesters at the ferry dock, urging a boycott of the service.[22] Although on-site protests eventually stopped, Community Air continues to monitor Porter's operations along with those of the TPA. The TPA confirmed at its annual meeting of September 12, 2008, that Porter was fined for breaking noise curfews in its operations following complaints from local residents.[23] The TPA commissioned a study to reduce noise from Porter's takeoffs and landings.[23]

The TPA and Porter remain partners in the expansion of the airport. In January 2009, the TPA announced plans to purchase a new, larger passenger ferry to support Porter's expansion plans. The ferry is to be financed out of an improvement fee to be charged to passengers.[15] The ferry had been proposed by Porter's Deluce to the TPA's Board of Directors over the period of March – June 2008.[24] The decision to approve the $5 million ferry precipitated a conflict-of-interest investigation of TPA director Colin Watson, who is a self-described friend of Deluce's, and who voted in a 5–4 decision to approve the ferry.[25] Watson was cleared of the charge by the federal ethics commissioner Mary Dawson in June 2009.[26]

In April 2009, Porter announced that it would build a $45 million terminal at the island airport, with Canadian Customs, restaurants, car rental kiosks, expanded lounge space and office space totalling 150,000 square feet (14,000 m2).[27] The terminal cost $50 million and its first phase opened on March 7, 2010.[6] It will be completed in 2011 and Porter hopes to add a US Customs section.

At the September 2009 annual meeting of the TPA, it was disclosed that Porter has broken its 11 p.m. curfew for landing at the airport three times in 2009, each time incurring a $5,000 fine. On one occasion, a Porter plane landed at the airport after-hours even though being ordered by controllers to land at Pearson.[28] According to Porter Airlines CEO Robert Deluce, "You know hundreds and hundreds and hundreds of flights come and go on a daily basis, so there are very, very few occasions where it happens. And there are also particular circumstances — and the circumstances are rare — to operate outside these normal times."[28] According to the TPA, they are powerless to stop Porter other than imposing fines, and that planes landing at the airport when no controllers are present is not a safety risk. TPA director Mark McQueen has requested that the NAV Canada personnel stay on-site until the last flight has landed, but NAV Canada has refused to do so.[29]

Destinations

As of October 13, 2011 Porter Airlines destinations are:

Porter Airlines lists proposed routes from Toronto to Cincinnati, Cleveland, Detroit, Pittsburgh, Philadelphia and Washington, D.C. currently in the United States. Canadian routes will follow as surprise in the coming months.[31][32]

Fleet

Porter Airlines Dash-8 at landing at Montréal-Trudeau airport

The Porter Airlines fleet consists of the following aircraft in a single-class, 70-seat, seating configuration (at May 4, 2011):[33][34][35]

Porter Airlines Fleet
Aircraft In Fleet On Order Options
Bombardier Dash 8 Q400 18 – –
Bombardier Dash 8 Q400NextGen 6 2 4
Total 24 2 4

Originally, Porter ordered ten 70-seat Bombardier Dash 8 Q400 turboprops, with ten more as options, at a value estimated by Porter of over $500 million. In June 2009, Porter exercised the option on the 19th and 20th Dash 8s.[36]

Porter chose the 70-seat configuration (less than the maximum of 78 seats) so as to land and take off safely within the length of the runway at Billy Bishop Airport; this also means Porter aircraft have a slightly greater seat pitch than a 78 seat aircraft. A fully loaded 78-seat configuration would need a longer runway than available at Billy Bishop. The 70-seat configuration also allows Porter to use the shorter runway 11/29 at Newark.[37]

In May 2010, Porter announced that it intended to order seven more Dash 8 Q400.[38] On August 6, 2010, it was announced that Porter had ordered four more Q400s with options for six further.[35]

Services

Shuttle service runs every 15 minutes from the Royal York Hotel
Toronto bus shuttle

In Toronto, Porter provides a bus shuttle from the downtown Royal York Hotel to the ferry dock at the foot of Bathurst Street. The Blue Bird Corporation Ultra LF buses are operated by Pacific Western Transportation.

The shuttle service had moved to the Royal York from its original location at 20 York Street, next to Union Station, in March 2008, when city construction for the Simcoe Street underpass blocked access. Porter planned to return to the location, but in September 2009, Porter was evicted from the 20 York Street building due to non-payment of rent.[39]

In-flight

Porter provides complimentary snacks and beverages (soft drinks, wine and beer).[40]

Flyer program

Porter Airlines offers a frequent flyer reward program called 'VIPorter', whereby points can be redeemed for free flights.[41]

Accidents and incidents

On April 21, 2009, one aircraft (C-GLQD) was damaged in an incident at Ottawa International Airport when the tail of the plane struck the ground on landing. The aircraft was taken out of service and brought back to Toronto Island Airport for repairs by Bombardier.[42]

On November 14, 2009, Flight 243 en route from Halifax International Airport to St. John's International Airport turned around after 45 minutes in the air. The captain lost consciousness en route and the first officer was forced to land the plane back in Halifax. The 39-year-old pilot had over 7,000 hours of flight experience. The flight took off again later in the day with a replacement crew.[43]

See also

Portal icon Toronto portal
Portal icon Companies portal
Portal icon Aviation portal


References

  • Dawson, Mary (June 25, 2009). The Watson Report. Office of the Conflict of Interest and Ethics Commissioner. 
Notes
  1. ^ "Contact Us." Porter Airlines. Retrieved on September 13, 2011. "Address: Billy Bishop Toronto City Airport Toronto, Ontario Canada M5V 1A1"
  2. ^ The World's official 4-Star Airlines. SKYTRAX. Retrieved on December 5, 2010.
  3. ^ a b c Jang, Brent (May 26, 2010). "Porter revenue rises before IPO launch". The Globe and Mail. http://www.theglobeandmail.com/globe-investor/porter-revenue-rises-before-ipo-launch/article1580389/. 
  4. ^ "About Porter – Our Team: Investors Background". Porter Airlines. http://www.flyporter.com/en/team_investors.aspx. Retrieved 11 February 2009. 
  5. ^ Jang, Brent (2009-11-10). "Porter loses its airport monopoly". The Globe and Mail. http://www.theglobeandmail.com/report-on-business/porter-loses-its-airport-monopoly/article1357477/. Retrieved 2009-11-11. 
  6. ^ a b "Media advisory – Billy Bishop Toronto City Airport terminal opening" (Press release). Porter Airlines. March 6, 2010. http://www.newswire.ca/en/releases/archive/March2010/06/c7632.html. 
  7. ^ "Porter Airlines Press release". Porter Airlines. http://www.flyporter.com/en/press.aspx#july_31. 
  8. ^ "Porter Airlines going public". CBC News. April 16, 2010. http://www.cbc.ca/money/story/2010/04/16/porter-ipo.html?ref=rss&loomia_si=t0:a16:g2:r2:c0.0229872:b32980904. 
  9. ^ a b "Porter Aviation’s IPO: Figuring the flight plan". CTV News. http://www.ctv.ca/generic/generated/static/business/article1539038.html. 
  10. ^ Deveau, Scott (June 2, 2010). Calgary Herald. http://www.calgaryherald.com/business/Porter+scraps+public+offering/3101371/story.html. Retrieved June 2, 2010. [dead link]
  11. ^ a b Pigg, Susan (October 5, 2002). Toronto Star: pp. E01. 
  12. ^ Cowan, James (6 July 2004). "Airline suing Toronto for $505M over bridge". The National Post: pp. A7. 
  13. ^ "New regional airline to serve Ontario, U.S". Ottawa Business Journal. 2 February 2006. http://www.ottawabusinessjournal.com/285319638411929.php. Retrieved 2008-09-25. [dead link]
  14. ^ CTV.ca staff (February 2, 2006). "New airline renews T.O. Island airport dispute". CTV.ca. http://toronto.ctv.ca/servlet/an/local/CTVNews/20060202/island_airport_060202. 
  15. ^ a b Lu, Vanessa; Aveling, Nick (22 January 2009). "Toronto's island airport gets second, bigger ferry; Newly expanded board of port authority says it will borrow $5 million". Toronto Star: p. A5. 
  16. ^ CTV.ca staff (30 October 2006). "Porter Airlines expanding service to Montreal". CTV.ca. http://toronto.ctv.ca/servlet/an/local/CTVNews/20061030/porter_airlines_061030. 
  17. ^ "Specifications". Bombardier. http://www.q400.com/q400/en/specifications.jsp. Retrieved 2009-03-30. 
  18. ^ "Airport Safety". Community Air. http://www.communityair.org/Issues/Airport_Safety/Airport_Safety.html. Retrieved 2009-01-26. 
  19. ^ Deloitte & Touche LLP (March 6, 2009). "Financial Reports for 2008" (PDF). http://www.torontoport.com/PortAuthority/REPORTS/Finance_2008_Eng.pdf. Retrieved 2009-07-23. 
  20. ^ a b "Jazz drops suit against Toronto Port Authority, Porter". CBC.ca. October 20, 2009. http://www.cbc.ca/fp/story/2009/10/20/2123574.html. Retrieved 2009-10-20. 
  21. ^ CTV.ca staff (23 October 2006). "Protests as Porter Airlines takes flight". http://toronto.ctv.ca/servlet/an/local/CTVNews/20061023/island_airport_061023/20061023?hub=TorontoHome. 
  22. ^ "Porter Airlines takes off despite protest". CBC News. 23 October 2006. http://www.cbc.ca/canada/ottawa/story/2006/10/23/porter-flight.html. 
  23. ^ a b "Port Authority refuses to rule out new ferry". The Globe and Mail. 12 September 2008. http://www.theglobeandmail.com/servlet/story/LAC.20080912.PORT11/TPStory/TPNational/Ontario/. 
  24. ^ Dawson, p. 25
  25. ^ Dawson, p. 15
  26. ^ Dawson, p. 18
  27. ^ Haines, Alison (27 April 2009). "Porter Airlines to invest $45M in expanded island terminal". National Post. http://network.nationalpost.com/np/blogs/toronto/archive/2009/04/27/269108.aspx. 
  28. ^ a b Lu, Vanessa; McLean, Jesse (September 4, 2009). "Sparks fly over late landings; Plane arriving after hours at island airport ignored advice to divert to Pearson, port authority told". The Toronto Star: p. GT1. 
  29. ^ "Activists complain about late landings at island airport". CBC News (CBC.ca). September 4, 2009. http://www.cbc.ca/canada/toronto/story/2009/09/04/island-airport.html. 
  30. ^ http://www.sedar.com/GetFile.do?lang=EN&docClass=9&issuerNo=00029809&fileName=/csfsprod/data106/filings/01564941/00000001/C%3A%5CSEDAR%5CFILINGS%5CPorter%5CPrelim%5CProspectus-English.pdf
  31. ^ "re: porter". Re:Porter (Fall 2009): 48–49. http://www.flyporter.com/common/docs/reporter_08.pdf. 
  32. ^ Marlow, Iain (October 31, 2009). "Porter eyes new U.S. routes". Toronto Star. http://www.thestar.com/business/article/719075--porter-eyes-new-u-s-routes. Retrieved 2009-11-05. 
  33. ^ "Porter Airlines Fleet – Canada Civil Aircraft Register". Transport Canada. http://wwwapps2.tc.gc.ca/Saf-Sec-Sur/2/ccarcs/aspscripts/en/quicksearch.asp. 
  34. ^ "Bombardier Q400 Program Status". Bombardier Aerospace. January 31, 2010. http://www.bombardier.com/files/en/supporting_docs/BA-Q-Series_Program_Status.pdf. Retrieved May 7, 2010. 
  35. ^ a b McCrank, John (August 6, 2010). "UPDATE 1-Porter orders four Bombardier turboprops". Reuters. http://www.reuters.com/article/idUSN0613388020100806. Retrieved August 6, 2010. 
  36. ^ "Porter Airlines exercises remaining two Bombardier Q400 options; Full initial order of 20 to be in service by spring 2010". Porter Airlines. 2009-06-29. http://www.flyporter.com/en/press2009.aspx?id=88. Retrieved 2009-06-30. 
  37. ^ Morra, Bernadette (April 2, 2008). "Porter Airlines takes a bite out of the Big Apple". Toronto Star: p. L3. 
  38. ^ Jang, Brent (May 7, 2010). "Porter claims airport advantage". The Globe and Mail (theglobeandmail.com). http://www.theglobeandmail.com/globe-investor/porter-claims-airport-advantage/article1558244/. Retrieved May 7, 2010. 
  39. ^ Deveau, Scott (September 2, 2009). "Porter Air evicted from shuttle site in rent dispute; Owes Nearly $9,500". National Post: p. A10. 
  40. ^ "In-Flight Service". Porter Airlines. http://www.flyporter.com/en/in-flight_service.aspx. Retrieved 2009-03-30. 
  41. ^ "Porter Airlines introduces VIPorter frequent flyer program". Porter Press Release. June 3, 2008. https://www.flyporter.com/en/press2008.aspx?id=59. 
  42. ^ "Incident: Porter DH8D at Ottawa on Apr 21st 2009, tail strike on landing". April 23, 2009. http://avherald.com/h?article=41886221. Retrieved 2009-04-27. 
  43. ^ "Porter airplane forced to return to Halifax". CBC News. November 14, 2009. http://www.cbc.ca/canada/nova-scotia/story/2009/11/14/ns-porter-pilot.html. 

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