Porter Airlines cleared for IPO

[Troubleshot]

Angus Kinnear was the CEO when C3 filed for the IPO in 2000 and had been the CEO for sometime.

[KAG]

Mr. D does have a history of building airlines and selling them. Either way Porter has come along way and has a nice brand with great service. I even like their mascot, very fitting for down town Toronto since the little bastards are everywhere.
Were the pilots given stock options?

[YYZatcboy]

All Employees will be given options IIRC.

[lionheart27]

It may be interesting to mention that the Q400 has to stay within certain ranges to be able to T/O and LND at Billy Bishop presently. Full Payload will put them at 4600/4200ft respectively. A bit too much for the 4000ft runway. Unless the runway gets expanded(major Landfill) the Q's are the way to go/
Jets at Toronto Island? That will cause a big stink by the city.
Presently their pouring all their funds into the Terminal expansion right now.
I'm not sure why the ferry is an issue for some people. No parking, no crazy terminal access traffic. I think at one point they may consider a type of bridge/ trolley/underground network but that's costly.

[sanjet]

A underground tunnel is being designed at this time to be built by next year.

[V1RotateV2]

The load factor of 48% is a BREAK EVEN LOAD FACTOR not the actual load factor of the company! The company is still private up until the IPO, so Mr. Deluce is not going to actually advertise the true load factor of the company! Read the article a little more closely!

Maybe YOU should do some more reading.
I know the Prospectus is long and a bit technical, but all the info is there. Full disclosure. The load factor has been below the break even point for all of 2009 (48% vs. 49%), therefore the loss of 4.4M.
Please, do not go by the articles in the papers. Porter spent as much money in marketing as in payroll last year, a huge amount. A full page in every major paper, every day of the week, buys a lot of good will from the press. Or at least delays, sweetens or avoids any bad news.

On the other topics: the TPA is already working on an underwater tunnel. Will be good business for some private company that gets the contract to build and operate it, when they could just use the 30+ million dollars they charge passengers as "airport improvement fee" every year. Anybody else wonders where this money goes to, at this, or other airports?.
The Prospectus also makes it a point of informing potential investors that Mr. Deluce left C3 six years before they went under, trying to put some distance between C3 and Porter.

[flyincanuck]

I've been googling for a few days. Where can I find the full prospectus?

[ScudRunner]

I've been googling for a few days. Where can I find the full prospectus?

http://www.sedar.com./search/search_en.htm


Search for PORTER and it will come up with the prospectus, I have not read through it yet as its 25 degree out and the beer is cold.

And from the Financial Post

http://www.financialpost.com/story.html ... z0lfSfiWb3

Since Porter Airlines Ltd. announced its plans last week to go public, the market has been abuzz with speculation as to how the offering will be received.

The Toronto Island airline plans to raise between $100-million to $120-million through an initial public offering, with a possibility of a 15% overallotment that could bring the proceeds up to $138-million, according to a source briefed on the deal.

While a price has yet to be set, it would be "shocking" if the initial public offering was priced at a discount to West-Jet Airlines Ltd.' s multiple, which continues to trade at a discount to its low-cost peers, said Doug Cooper, Paradigm Capital analyst.

WestJet currently trades at about 4.2 times his 2010 projected earnings per share, compared its low-cost peers at 5.6 times, Mr. Cooper noted.

"WestJet trades at such a discount to its U.S. peers, I would think that [Porter] would try to push it out at a higher valuation than West-Jet's," he said.

The preliminary prospectus Porter issued Friday was the first public look at the company's books, and it was sort of a mixed bag.

The carrier lost $4.6-million last year adding to the $11.5-million in losses it amassed between Sept. 1, 2007 and Dec. 31, 2008, and the $11.5-million it lost between its launch in October 2006 and Aug. 31, 2007.

While revenue has more than quadrupled over that period to $151-million, its expenses also ballooned to $155-million from $51-million in 2007 as well.

Porter's losses were also incurred despite a monopoly on the Billy Bishop Toronto City airport, which it will lose later this year when the Toronto Port Authority, which operates the airport, opens up Billy Bishop to competitors, including possibly Air Canada.

But Porter maintains it has been gathering momentum, with an average earnings before interest, tax, debt and depreciation margin for the past six months of 16.2%. It also had a profit of $455,000 in the fourth quarter of 2009 as passenger traffic began to return after the recession, the prospectus said.

That momentum also comes on the backdrop of a general increase in airline traffic in Canada. While the offering may spark some renewed interest and enthusiasm in the Canadian airline industry, Mr. Cooper said he still has some reservations about its long-term implications.

"The question is can Canada support three major airlines? Historically, it hasn't been able to," Mr. Cooper said.

It also had it renewing speculation that Porter might be setting itself up for a public auction for another carrier, like WestJet, to acquire Porter in an effort to tap into the estimated $2-billion short-haul market in Canada.

Porter said it plans to use the proceeds from its offering to buy nine new aircraft to add to the 20 Bombardier Q400s it will have in its fleet at the end of April.

"To me, it sets up a [situation] where Porter goes public to create a public vehicle and then puts itself up for sale," Mr. Cooper said. "It would certainly make a good tuck-in acquisition for WestJet."

scdeveau@nationalpost.com

[mattedfred]

JAZ.UN buys PD and the pilot groups merge DOH as that is the ALPA JAZ way

stranger things have happened

[flyincanuck]

man that was fast, thanks.

[ScudRunner]

man that was fast, thanks.

No worries bro, was just scouting it myself there was some discussion on A.Net


Come over to the Investing Fourm we have some weird voodoo knowledge about stuff in there.

[lionheart27]

On the other topics: the TPA is already working on an underwater tunnel. Will be good business for some private company that gets the contract to build and operate it, when they could just use the 30+ million dollars they charge passengers as "airport improvement fee" every year. Anybody else wonders where this money goes to, at this, or other airports?.

I smell a charge to use the tunnel. I'm starting to understand the point of this. 45 mill actually.
Are we working towards another Olympic Bid?
I still think they should beef up radar and landing facilities to the t's as well.
Is it going to be like London City Airport with their DLR(Docklands Light Railway) which is also underground. This makes more sense if it is. I guess this is only the beginning.
This is probably what Deluce had in mind all along if its all on his doing.
We're going to be a mirror of London City Airport
Interesting how a Canadian plane gave way to the idea of a STOL airport at London docks
"On 27 June 1982 Brymon Captain Harry Gee landed a de Havilland Canada Dash 7 aircraft on Heron Quays,"
The jets idea is feasible but the runway will need at least another 1000' which gives the possibility of Transatlantic flight! I can just read all the noise abatement laws right now. $5000 get outta here. This will make the eastern approach more interesting considering that's the only side that could be expanded. I wonder what the costs of that are going to be?
Maybe go for a Kansai or Kobe option?
That opens the floodgates for more routes and airlines to come in. Hey more jobs!
Routes to come from that LAX/YVR/YYC and the world mmmuuuuhahhaa!

[lionheart27]

This is interesting although some of you may know this already.
I actually just met two new hires at Porter and later 3 Nigerian Pilots that were there for the Q400 SIM. I think it can work for any series Dash 8

"From the Perspectus"

Porter has been successful in attracting experienced crews for its Q400s. As of April 1, 2010, Porter employs 88
Captains and 75 First Officers. The average number of flight hours for Captains is 7,000 and 3,500 for First Officers.
New pilots undergo three months of training before they are line-qualified and 12 months of line-duty before full
qualification is achieved. Under the supervision of Porter’s training department, initial ground school and simulator
training is performed by FlightSafety and the pilots are trained using FlightSafety International Level D simulator
equipment, the highest qualification level available.
A number of Porter’s management team were involved in the development of the Q400 with both the manufacturer
and training providers. As a result, flight crews have received simulator time utilizing scripts specifically designed
by the Porter team showing its own standard operating procedures and enhanced local operational situations and
information.
Crews receive simulator training every six months in accordance with Transport Canada’s air regulations for a
Canadian Aviation Regulations 705 Commercial operation. This six hour syllabus includes four hours of simulator
instruction plus a two hour flight check. Porter utilizes a newly designed FlightSafety on-line computer-based
training module for its technical ground school training.

During the 2008/2009 economic downturn, Porter continued to successfully expand its offering and employee base
and currently has approximately 850 FTE. This growth includes an increase of approximately 385 FTE or 80% in
2009 alone. All of Porter’s employees are non-unionized.

[Pratt]

If a bridge or tunnel for vehicles happen, is there sufficient space for parking on the island at the airport?

[Valhalla]

Valhalla wrote:
The load factor of 48% is a BREAK EVEN LOAD FACTOR not the actual load factor of the company! The company is still private up until the IPO, so Mr. Deluce is not going to actually advertise the true load factor of the company! Read the article a little more closely!

That was not me...

[Clark Kent]

If a bridge or tunnel for vehicles happen, is there sufficient space for parking on the island at the airport?

It will be a pedestrian tunnel, planned to be released for 2012 according from Mr. D.

[Pratt]

Thanks for the reply

[ettw]

RBC Direct Investing TM. would like to inform you that the following New Issue has just been announced. Porter Aviation Holdings Short Description: Initial Public Offering Common Voting (Cdn Investors)Price: $6 - $7 rangeSettlement: Expected Week of May 24.

Cheers,

ETTW

[ScudRunner]

The worst sort of business is one that grows rapidly, requires significant capital to engender the growth, and then earns little or no money. Think airlines. Here a durable competitive advantage has proven elusive ever since the days of the Wright Brothers. Indeed, if a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down.

— Warren Buffett, annual letter to Berkshire Hathaway shareholders, February 2008.

[Expat]

+1

[teacher]

How much will it pay out?

[Panama Jack]

So that you can brag at the bar that you are a "part-owner" of an airline.