Porter Airlines cleared for IPO

[Black Sheep]

"The three-year-old Porter Airlines, led by CEO Robert Deluce, is going public. Deluce's private holding company Porter Aviation Holdings Inc. Friday filed a preliminary prospectus with the securities regulators in all provinces and territories covering an initial public offering of Porter shares.

The underwriting syndicate is led by RBC Capital Markets Inc. and includes National Bank Financial Inc., BMO Nesbitt Burns Inc., CIBC World Markets Inc., TD Securities Inc., GMP Securities Inc., Credit Suisse Securities (Canada) Inc., Raymond James Ltd. and Versant Partners Inc.

Existing Porter shareholders will not sell shares in the public offering, the company said. It will use the proceeds to buy more aircraft. It will have a fleet of 20 Bombardier Q400 turboprops flying its expanding route network by the end of this month.

The amount to be raised by the offering will be disclosed later.

Porter Air, based at Billy Bishop Toronto City Airport (Toronto Island) is now Canada's third largest scheduled carrier flying to Montreal, Ottawa, Halifax, St. John's, Thunder Bay, Sudbury, New York (Newark), Chicago (Midway) and Boston (Logan), and seasonally to Mont Tremblant and Myrtle Beach, SC, and soon Moncton, NB.

Deluce said last month his airline was profitable on a "fully allocated basis" in 2009 and claimed it had a breakeven load factor of 49.3 per cent, plus a customer satisfaction rating of 93 per cent.

Porter has kept costs low by using a single-brand fuel-efficient turboprop fleet while attracting business and other customers with de luxe seating and good service. It recently opened part of a new $50 million terminal at Toronto City.

It will be busy with regional expansion for the time being, Deluce has said, but in the longer term it could buy mid-range jets to help it compete with Air Canada and WestJet.

Air Canada is taking action to get access to Toronto City for its Jazz regional unit.

© Copyright (c) The Montreal Gazette"


Read more: http://www.montrealgazette.com/business ... z0lIeVejK8

[Troubleshot]

Interesting. Gonna get more aircraft....how many I wonder?

[V1RotateV2]

Heard maybe 8-10 more Q400s off another operator (used).
According to Bombardier info, there are no orders pending for Porter.

In the long term, maybe the C Series, but this plane won't fly until 2013 if on schedule (big if, considering how a more experienced builder did with the 787) and the first almost 100 slots are already reserved.
If Porter wants some C Series jets, my guess is 2016+ deliveries.

[ScudRunner]

Third largest eh, someone should tell WestJet they where passed by Porter!

[ILS26_Steep]

They won't buy "used" since the aircraft have to be configured for the Steep approach, as well as 70 seat configuration and the correct MTOW category, (There are 4 different MTOW's for the Q400).
They can buy NEW aircraft from other operators that already have orders. Simply, some operators do not need there new Q400 by such a date and are willing to postpone delivery. Porter would then approach the said operator, offer to buy there slot as long as there is at least a 6-9 month leeway for bombardier to gather the correct parts to "Porter-ize" the required configuration necessary for porter airlines Q400 requirements.

C-Series is such a big rumour. Who says they won't go out and lease a CRJ 900 in the interim and wait till their new C-Series aircraft is ready to roll of the assembly line? Bombardier has apparently made that offer already!

[V1RotateV2]

I don't think a CRJ 900 will be able to operate where Porter needs it, while the C Series will: The Island.
According to preliminary data from BBD, the C Series will be able to land / TO from City Center with decent range. If Porter starts operating out of Pearson just to fly a jet, what would the competitive advantage be?
They would just become another carrier in a crowded market, fighting for passengers with either low price or better service, just like everybody else.

Regarding "used" Q400s: Planes that change hands usually only need a paint job, new interior and some paperwork. If the used planes are the heavier TO weight, what will the problem be?
If I am not wrong, steep approach, Cat II, and other certifications are nothing but paperwork and software in these type of aircraft. And lots of $$$$$, of course.

[Maxpwr]

I thought turbo-jets were prohibited at the island. Correct me if i'm wrong.

[V1RotateV2]

I thought turbo-jets were prohibited at the island. Correct me if i'm wrong.

You are correct, so far. With time and good friends in Ottawa, that can change.

[pilotbzh]

Isn't Air Canada openning up regional routes to new bidders.... Maybe Porter could bid on some of Air Canada routes....

[Maxpwr]

Isn't Air Canada openning up regional routes to new bidders.... Maybe Porter could bid on some of Air Canada routes....

Lol!

[ILS26_Steep]

I don't think a CRJ 900 will be able to operate where Porter needs it, while the C Series will: The Island.
According to preliminary data from BBD, the C Series will be able to land / TO from City Center with decent range. If Porter starts operating out of Pearson just to fly a jet, what would the competitive advantage be?
They would just become another carrier in a crowded market, fighting for passengers with either low price or better service, just like everybody else.

Regarding "used" Q400s: Planes that change hands usually only need a paint job, new interior and some paperwork. If the used planes are the heavier TO weight, what will the problem be?
If I am not wrong, steep approach, Cat II, and other certifications are nothing but paperwork and software in these type of aircraft. And lots of $$$$$, of course.

Firstly, the C-Series cannot operate out of the island. Not sure what your source for performance is on the C-Series, but according to Bombardier the C-Series needs 4,950ft for T/O and 4,430ft to land! The Island's longest runway is 3,995ft long. Kinda short of those requirements!
When it comes down the the Ottawa connection, its a pretty big deal unfortunately, since an agreement signed in 1985 called the Tripartite Agreement (which stipulates the STOL requirement for commercial passenger service from the island) needs to be amended or cancelled and is pretty hard to do! Also these C-Series numbers aren't even proven, since there isn't a model to flight test as of yet!
Secondly, who says Porter is going to operate a jet from Pearson airport or call Pearson a base? Ottawa has been a long rumour of a new base and would be ideal to handle jets for porter and a connection to Toronto via the Dash, considering the YOW-YTZ leg is only 40 minutes, gate to gate is a great business strategy. Don't just focus on the obvious, think outside the box! Porter's business strategy is to cater more toward the white collar traveler!
As for more Q400's, the steep ILS is more than just a supplement. Added hardware is required to perform this approach. MTOW isn't an issue, your right, but it goes outside the way of thinking at Porter. You would understand if you flew here! But why save here and there on a used plane, then spend shit loads on supplements, software, interior and paint when you can buy a new aircraft from Downsview for about the same cost?

[V1RotateV2]

Firstly, the C-Series cannot operate out of the island. Not sure what your source for performance is on the C-Series, but according to Bombardier the C-Series needs 4,950ft for T/O and 4,430ft to land! The Island's longest runway is 3,995ft long. Kinda short of those requirements!

Correct, at maximum TO and LW. With a reduced payload, operating out of the Island is possible. Anyway, that is when and if the plane flies close to theoretical numbers offered by BBD.

Ottawa has been a long rumour of a new base and would be ideal to handle jets for porter and a connection to Toronto via the Dash

Replace Pearson with Ottawa, Montreal or Halifax and my previous comments stand. Porter would just be another airline providing service out of those airports.
Agreed, people flying YOW-YHZ, for example, could take the Porter "jet" instead of the Dash, but why waste 30% more fuel to do the same thing?
Porter's average load factor of 48%, just under break even (2009, with a loss of $4.4M), would, in my opinion, not justify another type, more fuel burn, different pilot training, maintenance issues and higher costs just to get to YHZ 15 minutes earlier.

[ETOPS]

1) Take all the dirt from the new terminal.
2) Dump it into Humber Bay.
3) Pave.

And you're done.
If having a runway within pissing distance of Ontario Place is a no go, then just go the other way (closer to the hippie village ).

[ETOPS]

OK, I was just kidding, but...its not quite as crazy as it may seem.

extension.JPG (135.27 KiB) Viewed 3666 times

200' blast pads
1000' "no boat zones"
6000' runway

8400' total

Obviously I have no idea how much something like this would cost, and there might be an implication with clearing the smoke stacks on approach for 26, but I think its doable.

[C-FABH]

It's easier to dump the dirt in the Western Gap, too. Voila, no more ferry!

[Valhalla]

The finest jewel in Porter's crown is the Terminal, owned by Porter. There will be a projected 1.4 million passengers going through there this year. Owning the fuel tanks, all fuel trucks, deice trucks and hangars is nice for job security too.

[ILS26_Steep]

Agreed, people flying YOW-YHZ, for example, could take the Porter "jet" instead of the Dash, but why waste 30% more fuel to do the same thing?
Porter's average load factor of 48%, just under break even (2009, with a loss of $4.4M), would, in my opinion, not justify another type, more fuel burn, different pilot training, maintenance issues and higher costs just to get to YHZ 15 minutes earlier.

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!

[yycflyguy]

Nothing like lining your pockets with money from an IPO before riding off into the sunset.

[sanjet]

Nothing like lining your pockets with money from an IPO before riding off into the sunset.

http://www.theglobeandmail.com/globe-in ... le1537141/

Existing Porter shareholders will hold onto their own stock in the IPO, agreeing not to sell any equity stakes until at least six months after the offering’s closing, the prospectus said.

[Liquid Charlie]

How big would Porter have to be to bid on AC's fee for departure contract and would AC consider splitting the contract if it meant a cost savings - just pissin into the wind here but stranger things have happened.

[Troubleshot]

An IPO already, can anyone say Air2000/Canada3000. It's always amazing how at aviation history repeats itself in this country and we don't seem to notice.

Well considering WestJet was also 4 years old when they did their IPO....I would say no. But nice try with Canada 3000 reference, two totally different business models.....NEXT!!

[swervin]

It may be 2 different business models, but the same guy was/is involved with both companies...

[Troubleshot]

It may be 2 different business models, but the same guy was/is involved with both companies...

Well different companies don't always mean things will turn out the same...ask Mr. Morgan of EnerJet.......NEXT!!

[arsenal]

I believe he left C3 six years before it failed?

[Troubleshot]

Swervin said

It may be 2 different business models, but the same guy was/is involved with both companies...

My point exactly Swervin, thank you and if I was a betting man; well enough said for now, the "I told you so" can come later.

First off...you two can get a room.

Secondly...Bob Deluce's connection to C3 was to provide a Canadian share holder cause Air 2000 was not allowed to have a majority stake in a Canadian airline. He moved on well before that ship sank (as pointed out by arsenal)

Third....it was Angus Kinnear and Michel Leblanc that ran C3 into the ground...Sept.11th didn't help ethier.

And your right "enough for now" as I am speaking with someone that absolutley no idea what they are talking about.


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