Porter Airlines

Porter quietly reaches profitability in fast-changing Canadian market

Small Canadian carrier Porter Airlines during 2011 celebrated its fifth anniversary by recording its first annual profits as rival Air Canada spent most of the year embroiled in contentious labour negotiations with employees that have escalated into employees participating in work slow-downs during the last couple of months. In contrast, so far during 2012 Porter has enjoyed steady increases in its traffic as it continues expansion of its route network. But the carrier could start to see pressure next year in some of its markets as WestJet prepares to launch a regional subsidiary operating the same size aircraft as Porter, which could create challenges for the carrier in sustaining its new-found profitability.

Porter CEO Robert Duluce recently told The Ottawa Business Journal that Porter enjoyed its first profitable year in 2011 and expects to remain profitable this year. Porter reached its profitability milestone while some if its key business markets came under intense pressure.

Air Canada and Porter Airlines report load factor growth in Sep-2011 as WestJet load factors weaken

Air Canada, Canada’s largest carrier, and the much smaller Porter Airlines, reported improved load factors in the summer-winter transitional month of Sep-2011, while the nation’s second largest carrier and largest LCC, WestJet, reported weaker-than-expected load factors. This weakening load factor result occurred despite WestJet offering seat sales to stimulate demand and amid more aggressive growth in the month than at its larger rival. Porter Airlines’ load factor, while improving 12.2 points in the month, remains considerably weaker than its larger competitors.

While WestJet traffic growth was not able to keep pace with expansion in Sep-2011, it is widely expected that the carrier, with its lower operating costs than Air Canada, is better placed to weather potentially reduced travel demand amid an environment of global economic uncertainty. It is also expected that with capacity growth slowing in 4Q2011 and into 2012, and with healthy forward bookings, the load factor weakness in Sep-2011 could be rectified. 

Porter Airlines win surprisingly shuts Air Canada out of downtown Toronto airport slots award

A somewhat surprising awarding of the final 16 slots at Toronto City Island Billy Bishop Airport to incumbent Porter Airlines, which now holds 172 of the 202 available slots at the convenient downtown airport, comes with Porter's decision to once again shelve plans for an initial public offering (IPO) after failing in April 2010 to develop any interest in the CAD120 million (USD116 million) offer. An analysis of the slot issue tells the story of why Porter, which says it is profitable, was awarded the slots. Porter also shelved plans to raise private funding, adding that market conditions were little different than when it originally advanced its first IPO attempt.

Air Canada and WestJet report slightly weaker load factor in Jun-2011

Air Canada and WestJet Airlines, Canada's two largest carriers, both reported slight load factor reductions in the shoulder month of Jun-2011, but expressed optimism about a pick-up in demand during the peak summer travel months of Jul-2011 and Aug-2011. The much smaller Porter Airlines, meanwhile, reported 12.4 ppt load factor increase in the month, although its load factors remain more than 10 ppts weaker than its larger competitors.

Canadian market heating up as LCCs, majors and regional airlines go after one another

There is certainly been no dearth of news coming out of Canada what with the encroachment of WestJet in Air Canada’s Eastern Triangle market and the newly launched Billy Bishop Airport service by Air Canada Express Sky Regional inserting competition into the downtown Toronto Airport for the first time.