Porter posting a profit in 2011

[Valhalla]

After five years, Porter to post first annual profit


brent jang — TRANSPORTATION REPORTER

From Monday's Globe and Mail

Published Sunday, Dec. 11, 2011 7:20PM EST

Last updated Sunday, Dec. 11, 2011 8:05PM EST


Porter Aviation Holdings Inc. will post its first annual profit in 2011 after bolstering its passenger loads and fending off Air Canada.

Porter chief executive officer Robert Deluce said Air Canada (AC.B-T1.090.010.93%)’s arrival in May at Billy Bishop Toronto City Airport worried some loyal Porter customers, but the competition has turned out to be a blessing in disguise.

Instead of wilting under the pressure from Air Canada, Porter’s load factor – the proportion of seats filled by paying customers – surged during the May-to-November period. Porter’s planes, which have been roughly half-full on average during most of the airline’s five-year history, flew nearly two-thirds full over the past seven months.

Mr. Deluce said Porter is gaining traffic through a combination of luring connecting passengers from cities such as Thunder Bay, Sudbury and Windsor, greater brand awareness in U.S. markets, seat sales and, surprisingly, the presence of Air Canada.

“We had Billy Bishop on the map, but Air Canada has done a great job of putting it on the map with marketing campaigns. They’re drawing people to the airport, many of whom had never been here before,” he said.

“Even if their customers remain loyal to Air Canada on the Montreal route, they’re trying us on other routes,” said Mr. Deluce, whose employees have been monitoring Air Canada’s 15 daily round-trips on the Toronto-Montreal service.

According to privately owned Porter’s data, Air Canada’s average load factor at Billy Bishop has hovered around 30 per cent.

“We count their loads as passengers are getting on and off every flight. That’s fair ball. That’s something that they did to us in Ottawa and Montreal during our first couple of years of operating,” Mr. Deluce said. “There’s somebody sitting with a clipboard. We don’t hide the fact that we’ve got somebody there counting.”

Air Canada has 30 takeoff and landing slots at Billy Bishop, compared with Porter’s 172 slots, leaving the regional carrier as the dominant force at the island airport located near Toronto’s downtown core. While Porter serves 17 destinations from its Toronto base, Air Canada’s entire Billy Bishop schedule is on the Toronto-Montreal route. Both airlines fly 70-seat Bombardier Q400 turboprops.

Air Canada spokesman Peter Fitzpatrick said the Toronto Port Authority, which oversees Billy Bishop, has heavily favoured Porter when allocating slots.

“We’re pleased with the performance so far at the island airport, particularly as the Toronto Port Authority’s slot allocation policy restricts us to one destination, effectively maintaining Porter’s monopoly position,” he said.

Porter lost $44.5-million between its launch in October, 2006, and the first quarter of 2010. The carrier also lost money during the final nine months of 2010, though it declines to disclose how much.

The holding company owns Porter Airlines Inc. and City Centre Terminal Corp., the landlord of terminal space at Billy Bishop and collector of fees from Air Canada. “Air Canada is a competitor but they’re also tenants at our terminal. Their rent is as good as anybody else’s,” Mr. Deluce said.

[~Hollywood~]

That's good to hear. Good job to all the Porter guys and gals out there.

Also, YOW base opening in Mar 2012? Looking at expanding into YWG? Possibly ordering more Q's and looking at C series? Heard these from my girlfriend's brother's dentists son........

[Realitychex]

That's good to hear. Good job to all the Porter guys and gals out there.

Also, YOW base opening in Mar 2012? Looking at expanding into YWG? Possibly ordering more Q's and looking at C series? Heard these from my girlfriend's brother's dentists son........

Porter Airlines Sees Profitable 2009

September 21, 2009

Porter Airlines, a small Canadian regional carrier that has found a way to make money in hard times, expects to stay profitable this year and to keep expanding in 2010, its chief executive said on Monday.

National Post September 22, 2010

Porter Airlines Inc. packed more passengers onto its planes in August compared to a year ago, and for the year to date compared to the same period in 2009, according to monthly traffic figures released for the first time by the airline yesterday.

The Toronto Island-based airline said its load factor -- or average amount of seats filled on its planes -- hit 63.9% in August, up 11.4% points from a year ago, with its traffic improvements of 105% outpacing its sizable capacity increases of 69% during the month.
Year-to-date, Canada's No. 3 airline said its load factor was 52.6%, up 6.1% compared to the first eight months of 2009.

Robert Deluce, Porter chief executive, said the results put the airline in a "very good position" for the remainder of the year. He also said the carrier intended to release its monthly traffic statistics like Air Canada and WestJet Airlines Ltd. from now on in order to "inform the market about Porter's competitive positioning."

Globe and Mail Dec 12 2011

Porter lost $44.5-million between its launch in October, 2006, and the first quarter of 2010. The carrier also lost money during the final nine months of 2010, though it declines to disclose how much...

Until audited numbers are released, Porter's claims of profitability are a little bit like listening to and believing the boy who cried wolf.....

[Valhalla]

Until audited numbers are released, Porter's claims of profitability are a little bit like listening to and believing the boy who cried wolf.....

Well, this is the first time Bob Deluce has explicitly claimed profitablility at Porter. But hey, I didn't expect you to be happy to hear such news since you were so insistant in the past that Porter was doomed to never make money. I will, of course, expect you to have a nice rebuttal for the audited financials as well when they are eventually made public.

[ILS26_Steep]

Until audited numbers are released, Porter's claims of profitability are a little bit like listening to and believing the boy who cried wolf.....

Well, this is the first time Bob Deluce has explicitly claimed profitablility at Porter. But hey, I didn't expect you to be happy to hear such news since you were so insistant in the past that Porter was doomed to never make money. I will, of course, expect you to have a nice rebuttal for the audited financials as well when they are eventually made public.

Well we all know an IPO would have to happen for the books to be made available to the public. How much had Bob promised for profit sharing? Its suppost to be paid quarterly and so far. A FAT ZERO.

[Realitychex]

Until audited numbers are released, Porter's claims of profitability are a little bit like listening to and believing the boy who cried wolf.....

Well, this is the first time Bob Deluce has explicitly claimed profitablility at Porter. But hey, I didn't expect you to be happy to hear such news since you were so insistant in the past that Porter was doomed to never make money. I will, of course, expect you to have a nice rebuttal for the audited financials as well when they are eventually made public.

It is far from the first time profitability has been claimed.

Porter has yet to make any money. Their own data proves this.

When they string together 6-8 consecutive quarters of profitability, from a financial perspective, the venture will start to look interesting.

[Valhalla]

It is far from the first time profitability has been claimed.

This is really a moot point that at this point, that I couldn't care less about. I've said what I needed to say about this in the past, and I'm not going to comment further about journalistic speculation made in the past. This IS the first time Bob Deluce has been DIRECTLY quoted using the words "profit".

Porter has yet to make any money. Their own data proves this.

Your data is 2 years old when the business plan called for rapid expansion, infrastructure building and YTZ slot acquisition. 2011 was about seeing the results of the airport improvement and infrastructure growth coming to fruition.

When they string together 6-8 consecutive quarters of profitability, from a financial perspective, the venture will start to look interesting.

You're absolutely correct about this point.

[atpilot]

Great news! Keep up the good work. All the best.

[ziggy]

Valhalla, I have seen Deluce on TV saying that they were profitable, right out of his own mouth.

[Inverted2]

I think Valhalla is Deluce. This is the first time I have made this claim

[Valhalla]

Valhalla, I have seen Deluce on TV saying that they were profitable, right out of his own mouth.

ok.

I think Valhalla is Deluce. This is the first time I have made this claim

[justwork]

Until audited numbers are released, Porter's claims of profitability are a little bit like listening to and believing the boy who cried wolf.....

Well, this is the first time Bob Deluce has explicitly claimed profitablility at Porter. But hey, I didn't expect you to be happy to hear such news since you were so insistant in the past that Porter was doomed to never make money. I will, of course, expect you to have a nice rebuttal for the audited financials as well when they are eventually made public.

Well we all know an IPO would have to happen for the books to be made available to the public. How much had Bob promised for profit sharing? Its suppost to be paid quarterly and so far. A FAT ZERO.

The information you provided on Porters profit sharing pay out schedule is incorrect, or maybe it's been revised since you worked there. Also it is based on EBT, which is why the pay outs have been what they are.

[twinpratts]

That's great news!
All the best in 2012 everybody.

[alfie]

If Porter is not making money than who is? I know as a frequent Porter passenger travelling the YYT/YHZ/YUL/YOW/YTZ routes these flights always have a very high load factor,certainly anytime that I have travelled.Our Company does utilize the other airlines when it is required for our business schedules; but I must say in comparison there loads are never as high as Porter! I, for one, can only see them as being a profitable Company, at least on these routes. As a frequent passenger I would say, seeing is ``fact`` ! What is missing to indicate otherwise?

[Troubleshot]

I am happy to see Porter doing well, That being said I know for a fact that their maintenance dept. is one unhappy group of campers. Not saying that their planes are not being maintained well, far from it....but I will say things are not well there in that dept.

Hopefully it is just growing pains but from what I am hearing and seeing through e-mails....well lets just say it ain't pretty.

[The Raven]

Can't make money (well maybe you can) when you cancel all your flights for the rest of the day. This notice was put on the Porter website mid-afternoon.

[b]Weather Advisory for Toronto (YTZ) - December 30, 2011


Due to weather limitations, all remaining flights departing from Toronto City Airport have been cancelled for Friday, December 30[/b]

[rudder]

Nor when you add yet another 50% off sale (that you swore was a thing of the past).

Porter is definitely a thorn in the side of WJ and AC but profitability is not a likelihood for PD any time soon.

[aileron]

Nor when you add yet another 50% off sale (that you swore was a thing of the past).

Porter is definitely a thorn in the side of WJ and AC but profitability is not a likelihood for PD any time soon.

Ahh, ya... just like all other airlines fare deals - read the fine print:

"...Fares may not be available for the entire promotional period. A return trip is not required to qualify for this one-way fare. Seats at these fares are limited and may not be available on all flights...

Kind of like when WS advertises "X Seats at this price". Duh.

[dashx]

So for sound business advice should one be checking the fiction or non-fiction aisle of the Deluce library?

[aileron]

So for sound business advice should one be checking the fiction or non-fiction aisle of the Deluce library?

Well certainly not this peanut gallery!

Happy New Year everyone, may your 2012 be everything you hope.

[Donald]

That being said I know for a fact that their maintenance dept. is one unhappy group of campers.

I've been at a few places and it seems that maint people are like any other labour group, never satisfied. Why should Porter be any different?

You can't please all the people all the time...

[Jastapilot]

huh. I heard a rumor yesterday, only a rumor you see, that Porter is now in debt to the tune of $200 million. I hope it's not true.

[Valhalla]

huh. I heard a rumor yesterday, only a rumor you see, that Porter is now in debt to the tune of $200 million. I hope it's not true.

It's hard to say, but your rumor probably makes sense with all the asset growth at Porter since the prospectus a couple of years ago (the last public peek at Porter's finances). All that long term dept has bought a lot of airplanes and a terminal among other things. I'm not really sure why this would be so shocking.

As a comparison, Westjet's last financial report showed $725 million in long term dept, and Air Canada has over $4 Billion!

[Deltawidget]

Be careful with these types of numbers.

Even though the debt level may have grown, POE may be generating relatively more (and possibly more stable) cash flow. Also, where is the debt located, at Porter Airlines or at one of Deluce's holding companies?

I cant remember the details of how POE finances its aircraft, but the debt could be at one of Deluce's holding companies and Porter (the airline company) services the debt via regular operations (standard operating lease)

Don't let a growing number such as "debt" alarm you. To the extent that someone can service the debt with on going operations AND if the debt was used to purchase or build assets, rather than fund operational funding deficiencies (i.e. you borred $50Mil to build a terminal which generates cash flow, rather than borrowing $50Mil to cover expenses in excess of revenues)

[Deltawidget]

Actually...just took a quick glance at the IPO documents... at December 2009, POE had $327.2M in long term debt...
So Justapilot, whoever informed you of the "rumor" that POE has $200M in debt, well that rumor is likely false. 2 years ago, POE had significantly more than $200M in debt and has only grown since then. I dont think the second phase of the terminal was even complete then...

It's not unusual for growing companies to incur debt to grow. The tough part is convincing future equity holders to provide equity financing which is generally used to pay down bank debt in exchange for an ownership stake. The problem for POE has been that when equity investors were shown the books, their reaction was "oh...um... there are next to no profits here for shareholders...."