Porter's IPO

[Flightlevels]

What's westjets position? We don't do them to have that headache. Organic growth baby.

[mattedfred]

A wise pilot group has a merger policy even when they feel that the likelihood of a merger is very low.

I speak from experience that pilot mergers do not always give you a headache.

[Hoov]

Sorry... JALP is?

[Flightlevels]

I've got that t shirt too matted. We're not all dumb here

[Jack Klumpus]

Sorry... JALP is?

Jazz Air LP

[mattedfred]

I've got that t shirt too matted. We're not all dumb here

I don't think that any of you are dumb and did not infer that you were.

Just food for thought from a fellow aviator.

[pika]

Lifted from another site.

Porter Airlines – Where’s the Momentum?

Porter Aviation Holdings’ Final Preliminary Prospectus, released last Wednesday, reveals some disturbing numbers in its first quarter (Q1) 2010 financial results.

Having spent $25 million in sales and marketing over the 2009 year, what does it have to show for that spending in 2010? Do the Q1 2010 numbers disclose any momentum in a positive direction?

A comparison between the last two consecutive quarters, Q4 2009 and Q1 2010, tells the story. Revenues dropped by $4,300,000. Operating expenses increased by $2,164,000. Cost per available seat mile increased almost 10% - from 22 cents to 24 cents. Net income of $455,000 in Q4, 2009, slid in Q1 2010 to an operating loss of $5,972,000 in Q1 2010. That loss over three months is $1,363,000 greater than the total loss for all of 2009.

Surprisingly, these worsening numbers were achieved after spending a whopping $7.4 million on sales and marketing in Q1 2010, and regularly offering discounted pricing.

Other numbers also paint a difficult financial picture. Porter’s load factor (percentage of seats filled) dropped in Q1 2010 to 47% from 50.2 % in Q4 2009. The Q1 load factor dropped slightly below the total 2009 figure of 47.9%. Still flying with more than half its seats empty. Working capital deficit ($11,846,000 as of December 31, 2009) deteriorated to $33,467,000 by March 31, 2010.

Restricted cash ( money held by credit card companies as security for unused ticket purchases, should they have to be refunded) jumped from $12,256,000 at December 31, 2009 to $17,581,000 at March 31, 2010 Unrestricted cash fell by $10,732,000 to $9,179,000 at March 31, 2010 – enough for about two weeks’ expenses (monthly expenses are now almost $18 million).

Accounts payable rose to almost $28 million from $24 million at December 31, 2009. Given spending of $14 million per month (excluding salaries) in Q1 2010, suppliers are waiting about two months to be paid. How patient will they continue to be?

As reports from Porter’s customers are positive, one would have expected these numbers to be much more positive. Producing worsening numbers after almost four years of operation and massive expansion suggests there’s something deeply wrong with Porter’s business model.

As one long-time industry insider noted:
"Their operating margin including interest as an expense places them squarely, and quite handily, as the worst performing airline in North America in 1Q 2010. For the record, that margin is -16.11%. As I recall, the next worst was AMR [American Airlines] at -10%."

Another financial analyst put it this way:
"What's wrong with this picture? A 4 year old monopolistic airline with a sophisticated operation generates a $6 million dollar loss in Q1 2010 notwithstanding a doubling of passenger volume vs. Q1 2009 and heavy price discounting across the board.
And Porter could only manage to fill 47% of seats available?"

[arsenal]

Pika: It would help if you included the author of the articles you post.

As it happens, the author of the article you lifted from thebulletin.ca is Brian Iller. He is also the Chair or CommunityAIR. An organization that wants to shut down the Island Airport and has opposed just about everything Porter has tried to do.

I think that provides a little perspective.

[pika]

You seemed to get the idea even without the author.

Now, the article deals with numbers. Can you add anything to further the point related to numbers or is it simply easier dismiss it because you don't care for the author's stance?

[arsenal]

I think you can find numbers to justify just about any ideology.

Correct me if I'm wrong, but i think Q1 is normally the worst for any airline. I don't think that it is fair to compare Q4 2009 to Q1 2010.

Generally when airlines release their Quarterly results they are compared against the same quarter a year before.

[altiplano]

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[pika]

It at least means you better look a little deeper into it before you acccept it as face value...

I'm sure you could point out the errors in the numbers then?

[altiplano]

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[aileron]

from realitychex, (I'm not buying any stock) pretty good assessment IMO


Porter launched its high cost, low fare strategy in 1Q 2010, resulting in higher loads, but forcing yields down 15.7% and rasm down 5.1%.

Oh dear. Look what happened to the BELF. It shot up to 54.62%.

etc, etc...

Someone was asking what pet peeves they had; mine, in particular, is copying and pasting articles without the reference, link or author (who is realitychex?). Would you please refer the article's location so we may become a bit more familar with the scope and context and make a better judgement than the narrow pasted reference. Thanks.

[ivanhoe]

KaBoom...

PORTER AVIATION HOLDINGS INC.


Transmitted by CNW Group on : June 1, 2010 16:13
Porter Aviation Holdings Inc. defers IPO due to market conditions
TORONTO, June 1 /CNW/ - Porter Aviation Holdings Inc. announced today that it has decided not to proceed with the previously announced proposed offering of its common equity due to unfavorable market conditions caused by volatility in the equity markets.

"Given current market conditions, we believe it is prudent to defer the offering at this time," said Robert Deluce, president and chief executive officer of Porter Aviation. "Our company is well-positioned to wait until the equity markets stabilize before deciding whether to proceed with a new public offering."

Porter Airlines' business continues developing well with year-over-year passenger numbers improving by more than 150,000 in the first quarter of 2010 and profitability metrics showing significant gains over the same period.

About Porter Airlines

Porter Airlines is Canada's third largest scheduled carrier, based at Billy Bishop Toronto City Airport. Porter is committed to offering speed, convenience and service as part of a premium travel experience. A refined journey begins on the ground with comfortable airport lounges and service-oriented team members. The experience continues seamlessly in the air with spacious interiors and well-appointed crew. Passengers enjoy complimentary services, including free in-flight wine, beer and premium snacks, all aboard modern aircraft.

In 2009, Porter achieved an industry-leading break-even load factor of 49.3 per cent relative to other North American publicly traded airline companies. The airline was also noted in 2009 as part of Ipsos' independent Canadian Business Travel Study with 93 per cent of customers being at least very satisfied with Porter. Of this number, 54% were extremely satisfied.

[altiplano]

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[Altsel]

Something tells me "Pika" either got PFO'd from Porter or works for Jazz, these two examples are the only reason to explain why someone would want an airline and all of its co-workers of the sky, to fail.

Canada's aviation environment is so hostile, last time I checked, we all do the same thing, regardless of the uniform or logo on the tail. I'm not sure why Jazz has so many haters, could swear I see lots of them jump-seating on Porter, good thing it's not hypocritical to do so.

I wonder if all you media cravers read movie reviews before you go to the movie, cause they hate just about everything.

Time will tell, everyone needs to settle down, go watch some TMZ if your bored.

[pika]

Don't work for Jazz and never got PFO'd from Porter. Fact is, with heavy Boeing time I doubt they would even consider me.

Why do facts/numbers bother you so and how do you interpret that I want Porter to fail? All I did was post the numbers which obviously show a serious situation. It's Canadian aviation; some say you're not a real airline pilot until you've ridden a company in so enjoy the ride.

[Altsel]

Pretty sure that isn't the reason they wouldn't consider you, and congrats on the heavy boeing time, your credibility just went up 10 fold.

[pika]

Thanks man, means a lot coming from you. Now, back to the point; why do the numbers bother you so much?

[widebody300er]

Thanks man, means a lot coming from you. Now, back to the point; why do the numbers bother you so much?

Pika...numbers bother him because he works for the company and the truth hurts..many airline experts agree Porter is headed in a not so good direction...we have all seen this before in Canada it is a reality...however people will continue to look the other way until the job is gone...good luck to all the porter cool aid drinkers...

[Altsel]

You couldn't be further from the truth widebody, not even close by a long shot. The point I was trying to make is that the numbers don't effect or bother me at all, has nothing to do with me. Porter is only a 3 year old company, and has been doing nothing but growing. Maybe we can have this chat a year from now and see where they are, a little to soon to have a yard sale no??

What I cant understand, is why us, as an aviation community, feel its necessary to froth at the mouth at the sign that someone may be in trouble, or not doing so well on paper. Skyservice was doing great on paper, and looked what happend, Zoom was months away from weathering the storm and the same thing happened. Its kind of sad, that people smirk at the news that another company goes belly up.

People make companies, these people have families, houses, bills to pay etc......... To appreciate the fact they may be in jeopardy, and how some "post'rs" seem to get off on other peoples misery is really sad. Lets support each other and hope that none of us ever lose our jobs. Doesn't matter what colour the "kool-aid" is you talk of, again, we all do the same thing.

So lets raise our glass of that fruity punch, and appreciate what we all have.

[pika]

Porter is only a 3 year old company, and has been doing nothing but growing.

This is exactly the point. Anywhere between $30-40 million in losses, worst operating margins in North America for any publicly traded airline, and unprofitable. The markets called bs and many here are doing the same as this saga has been seen many times before. It's unsustainable.

Please Note: It's nothing personal. Nobody is frothing at the mouth hoping to see Porter disappear. It's just numbers.

[WF9F]

Val,
I have flown into London City many times and YTZ will never come close to it. Even if it were joined to downtown via a fixed link it would have to get super busy to even come close to City.
It will never happen, we don't have the population.

[mattedfred]

I'm not sure why Jazz has so many haters, could swear I see lots of them jump-seating on Porter, good thing it's not hypocritical to do so.

easy there. try and fight the urge to generalize will you. not all jazz pilots wish ill will on our fellow aviators. i rely on porter for my commute and i hope they continue to operate. i also hope that jazz buys them though.