Porter Airlines is a regional airline headquartered at Billy Bishop Toronto City Airport on the Toronto Islands within Toronto, Ontario, Canada. Owned by Porter Aviation Holdings, formerly known as REGCO Holdings Inc., 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 with some controversy. Robert J. Deluce, who is now the CEO of Porter Airlines, came up with the idea of creating a regional airline using Bombardier turboprop aircraft to major cities of Canada within the range of Toronto. A planned bridge to the airport was cancelled in 2003, leading to lawsuits between Deluce and the City of Toronto. The airline lost the case in court but the idea for the airline remained. With the compensation received from the Toronto Port Authority for the lawsuit, REGCO bought the island airport terminal used by Air Canada Jazz and terminated Air Canada's access. 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 2013, Porter made a proposal to expand Toronto Island airport to allow jets. As of November 2013, the controversial proposal is being studied by the City of Toronto.
§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 - part of the Deluce aviation family--with brother Peter, son Michael and others has been an owner and/or executive with Air Ontario, Canada 3000 and other airlines.
- Robert J. Deluce is President and CEO of Porter Airlines and Porter Aviation Holdings Inc. 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.
- D. Paul Moffat, Chief Financial Officer.
- Andrew Pierce - Director of Commercial Planning.
- Paul Larocque - Director of Information Technology.
Source: Bloomberg Business Week
- 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.
- James Little - Chief Marketing Officer at Shaw Communications, Inc.
- David Wilkins - Former U.S. ambassador to Canada.
Source: Bloomberg Business Week
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).
In 2009, Porter's institutional investors include EdgeStone Capital Partners, Borealis Infrastructure, GE Asset Management Incorporated and Dancap Private Equity Inc. In 2013, Porter's investors are listed as EdgeStone Capital Partners, OMERS Strategic Investments, GE Asset Management Incorporated and Dancap Private Equity Inc.
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 operates the terminal 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. The first half of the new terminal opened on March 7, 2010. The terminal was completed in early 2011. The new terminal has ten gates, two lounges, check-in and security areas, and food outlets.
The airline's mascot is a stylised raccoon named "Mr. Porter". 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.
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. 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. 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."
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. In 2011, the airline filled 55.9% of its seats. As part of disclosure for its public offering, Porter disclosed that from its startup in 2006 until May 2010, Porter lost $44.5 million. In an interview with Toronto Life magazine in May 2013, Robert Deluce stated that Porter turned a profit in 2011 and 2012, and paid out profit sharing.
§History
Porter Airlines' launch was controversial. In 2002, the 'Toronto City Centre Airport', or 'Island Airport', operated by the Toronto Port Authority (TPA) (renamed in 2015 as "Ports Toronto") was losing $1 million per year. Only Air Canada flew flights from the airport as part of its "Jazz" service, operating daily flights to Ottawa after the closure of the regional airline City Express in 1991.
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. 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. 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. 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. 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.
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.
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. 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.
Jazz filed a $11.5 million lawsuit 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. On October 20, 2009, Jazz formally dropped its suit in Ontario Court, but plans to continue its lawsuit 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. 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.
The airline's maiden flight took place on October 23, 2006 to Ottawa. When flights began, airline passengers were at first blocked by protesters at the ferry dock, urging a boycott of the service. 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. The TPA commissioned a study to reduce noise from Porter's takeoffs and landings.
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. The ferry had been proposed by Porter's Deluce to the TPA's Board of Directors over the period of March - June 2008. 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. Watson was cleared of the charge by the federal ethics commissioner Mary Dawson in June 2009.
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). The terminal cost $50 million and its first phase opened on March 7, 2010. 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 after being advised by controllers to land at Pearson. 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." 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.
In February 2012, Transport Canada advised Porter it had received an Access to Information request for what are called "Notices of Suspension issues to Porter." Such notices are departmental warnings with strict deadlines to deal with problems that could be safety related, but could also be demands to replace key personnel, like pilots, who have left the company. Transport Canada told Porter it was considering releasing some information and wanted a written response from the company detailing why any records should be withheld. Based on Porter's response, the department decided to release a censored version of the material in question. Porter went to court to prevent that from happening.
On January 10, 2013, 22 Porter ground crew members went on strike in Toronto. This is the airline's first labour dispute since it began business. In April 2013, Porter filed a libel lawsuit against the Canadian Office and Professional Employees union representing the 22 striking workers. Porter suit was for $4 million in damages for alleged defamatory statements made by the union using its Twitter account. The strike was settled in June 2013, and Porter's lawsuit was dropped.
§2013 Toronto Island Airport expansion proposal
In April 2013, Porter announced expansion plans to serve new destinations in Western Canada, California and Florida. To support the expansion, Porter reached a provisional agreement to purchase 12 107-seat Bombardier CS100 jets, with a future option to purchase up to 18 more. Porter's plans require regulatory and facility changes to its Billy Bishop Toronto City Airport hub. Porter has asked for modifications to the operating agreement of the airport to allow jets and extensions to the runway to support the new aircraft. Changes to the operating agreement require the agreement of the Toronto Port Authority (TPA), the City of Toronto and the Government of Canada. TPA stated that it had no position on the expansion and would await a decision from Toronto City Council. Toronto Mayor Rob Ford has indicated his support for the proposal while some councillors expressed their opposition, and some urged further study.
Porter first approached Toronto Mayor Rob Ford before its public announcement. Deluce was a supporter of Ford already and sought his support privately on the proposal. However, the meetings between Ford and Porter CEO Deluce raised controversy as Deluce had not registered as a lobbyist. In 2010, Deluce had contributed the maximum $2,500 to Ford's mayoral campaign. Other Deluce family members donated an additional $5,000 to Ford's campaign.
When announcing the proposal, Porter Airlines claimed in advertisements that 2/3 of Torontonians polled supported the expansion. However, the result was disputed by pollster Warren Kinsella. He considered the survey's trustworthiness tainted as it was done by Nick Kouvalis, Ford's 2010 campaign manager, and the questions were 'directing' the result. The No Jets TO group filed a complaint with the Advertising Standards Council of Canada, calling the ads "patently false".
Toronto City Council held public consultations during the fall of 2013 on the proposal, leading to a city staff report addressing the proposal. At the same time, Porter mounted a public relations campaign, based around the porterplans.com web site. Porter customers were telephoned and e-mailed and radio and newspaper advertisements were bought by Porter asking for the public to register their support with Toronto Council. After the consultation, and study of consultant reports, City staff recommended in a report to delay acting on the proposal until 2015. Concerns about the required infrastructure, public health concerns and the lack of an airport master plan were cited by staff. The TPA was also seeking an extension of the airport management agreement as a condition of the proposal. City Council's Executive Committee on December 5 voted to delay consideration of the proposal until 2014.
In January 2014, the Toronto Port Authority announced that it would seek $100 million from the federal government to expand infrastructure around the airport if the expansion plans and jets are approved for use at the airport. Another public hearing at Council was announced for January 27, 2014.
§Destinations
As of February 24, 2015 Porter Airlines destinations are:
§Interline agreements
On September 17, 2012, Porter Airlines announced a new interline agreement with South African Airways in which passengers would fly from Toronto-Billy Bishop to Washington-Dulles on Porter, and then transfer to South African to either Dakar, Senegal or Johannesburg. Porter also has an interline agreement with Qatar Airways in which passengers can fly to Washington-Dulles on Porter and connect to Qatar Airways to Doha. In January 2013, Porter announced an interline agreement with Singapore Airlines with connections between Porter at Newark Liberty International Airport. In July 2013, Porter Airlines and Icelandair signed an interline agreement allowing customers to book a single e-ticket for Porter Airlines and Icelandair flights and booking baggage through to the final destination. Connections from 10 Canadian gateways between airlines are available in Halifax (seasonally), Boston, Washington-Dulles, and Newark. This marked the first time Porter had signed an interline agreement providing access to Europe. Additional airline partners include El Al Airlines and Sata International. An agreement with JetBlue sees passengers connecting to eight additional US destinations through Boston.
§Fleet
The Porter Airlines fleet consists of the following aircraft (as of April 11, 2013):
? Conditional on approval of expansion of Toronto island airport.
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. Porter chose the 70-seat configuration (less than the maximum of 78 seats) due to the short length of the runway at Toronto Island Airport; a fully loaded 78-seat configuration would need a longer runway than available at the airport. This means Porter aircraft have a slightly greater seat pitch than a 78 seat aircraft. The 70-seat configuration also allows Porter to use the shorter runway 11/29 at Newark. In May 2010, Porter announced that it intended to order seven more Dash 8 Q400. On August 6, 2010, it was announced that Porter had ordered four more Q400s with options for six more. In November 2011, Porter Airlines accepted two new Bombardier Q400 NextGen aircraft, bringing the company's fleet to 26. In late 2013, Porter added an additional 4 seats to all of their Q-400's, giving them a total of 74 seats per aircraft.
In April 2013, Porter Airlines announced a conditional purchase agreement for up to thirty Bombardier CS100 aircraft, including purchase rights for six more Q400 NextGen aircraft. Porter had signed a letter of intent with Bombardier in December 2012. The total value of the deal would be US$2.29 billion should all 30 CS100s and six Q400s be purchased.
§Services
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.
Porter provides complimentary snacks and beverages at their lounges at Toronto's Billy Bishop, Ottawa International and Newark Airport. In-flight, Porter provides complimentary snacks and beverages (soft drinks, Jackson-Triggs wine and Steam Whistle beer). Porter Airlines offers a frequent flyer reward program called 'VIPorter', whereby points can be redeemed for free flights.
§Safety concerns
On February 9, 2012, Transport Canada advised Porter it had received an Access to Information request for what are called "Notices of Suspension issues to Porter." Such notices are departmental warnings with strict deadlines to deal with problems that could be safety related, but could also be demands to replace key personnel, like pilots, who have left the company. Transport Canada told Porter it was considering releasing some information and wanted a written response from the company detailing why any records should be withheld. Based on Porter's response, the department decided to release a censored version of the material in question. Porter went to court to prevent that from happening. On July 11, 2013 the federal court ruled in Porter's favour and the Confidentiality Order dated September 14, 2012 would remain in effect. A technical issue with Transport Canada's handling of the matter was cited as the reason for the ruling.
§References
- Dawson, Mary (June 25, 2009). The Watson Report. Office of the Conflict of Interest and Ethics Commissioner.
§External links
- Porter Airlines web site
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