Toronto City Centre Airport

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. 

Airlines invest in airports. A growing trend

The contract offered by Latvia’s Riga Airport to national airline airBaltic to build and operate a EUR92 million terminal for seven million passengers per annum by 2014 is unusual but not unique. For more than a decade airlines have been investing in some of the airports at which they operate, and on some occasions as the only investor. A new report published by CAPA highlights this practice.

Porter Airlines' IPO document reveals red ink, but management sees lots of blue sky

Hoping to capitalise on the recent upswing in airline stocks, Porter Aviation Holdings on 16-Apr-2010 filed its preliminary prospectus for an initial public offering. Porter did not specify the number of shares that will ultimately be made available, nor the price it expects to achieve. However, it is targeting CAD120 million as proceeds from the IPO. Current stockholders would not be selling any shares.

Porter Airlines to press advantage with new terminal at Toronto City Center Airport

With Air Canada and others chomping at the bit to gain access to the Toronto City Center Airport, three-year old Porter Airlines pressed its advantage at the site by showing off the initial phase of the new CAD50 million, 150,000 sqft terminal set to open next month. Porter Airlines’ new home at Billy Bishop Toronto City Airport opens to passengers on 07-Mar-2010 and the airline expects 1.3 million passengers in 2010 compared to the 22,000 that used the airport prior to Porter’s launch.