Go! Porter Go!Regco leads Porter's private backers
BRENT JANG
TRANSPORTATION REPORTER
Five private groups are backing Porter Airlines Inc. with $125-million in equity, hoping that the upstart carrier will be able to survive brutal fare wars and carve a regional niche.
Porter's top four co-owners control 96.9 per cent of the carrier, which flies out of Toronto City Centre Airport, according to documents submitted to the U.S. Department of Transportation.
The key shareholders are: Regco Capital Corp. (42.6 per cent), headed by Porter president Robert Deluce; the Ontario Municipal Employees Retirement Board's Borealis Infrastructure Management Inc. (21.4 per cent); equity fund EdgeStone Capital Partners (18.3 per cent); and GEAM International Private Equity Fund (14.6 per cent), part of the General Electric Co. empire.
The filings are part of an application by Porter to expand by the end of this year to Newark Liberty International Airport.
A fifth shareholder, Dancap Private Equity Inc., has the remaining 3.1-per-cent Porter stake.
Toronto-based Porter has been battling for passengers travelling to Ottawa since October, and to Montreal since December. Air Canada and WestJet Airlines Ltd. have welcomed the new kid on the block by frequently slashing ticket prices, putting pressure on Porter to fill seats, especially in non-peak times.
Yesterday, on the Toronto-Montreal route, for instance, Air Canada and WestJet offered one-way fares as low as $69, before taxes and other charges. But Porter's lowest one-way fare on the route was $89.
For Toronto-Ottawa service, Air Canada and WestJet promoted one-way prices as low as $59, compared with Porter's cheapest rate at $79.
But Mr. Deluce said in an interview yesterday that Porter is trying to persuade consumers to factor in more expensive cab rides for most travellers heading to Toronto's Pearson International Airport, compared with taxi fares to the downtown Toronto air terminal.
Mr. Deluce, who is slated to appear at an investment conference in Toronto next Wednesday, said Porter isn't planning any initial public offering. "We accepted the invitation by National Bank Financial to talk to an influential crowd of financial people, but we don't see any requirement for any additional capital," he said.
The filings list Porter's board of directors as chairman Donald Carty, a former American Airlines chief executive officer, Samuel Duboc and Stephen Marshall of EdgeStone, Michael Rolland and Andrew Lin of Borealis, Toronto lawyer Jacques Demers, and Mr. Deluce.
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