Porter's loss of slots at EWR

[midwingcrisis]

Virgin America is getting Newark slots from American Airlines (and United and Porter are losing them)

http://aviationblog.dallasnews.com/2013 ... them.html/

[fingersmac]

"Porter Airlines says it’s ‘business as usual’ despite potential loss of Newark slots"

http://business.financialpost.com/2013/ ... ark-slots/

[Realitychex]

"Porter Airlines says it’s ‘business as usual’ despite potential loss of Newark slots"

http://business.financialpost.com/2013/ ... ark-slots/

Porter said it was profitable for all those years prior to their failed IPO attempt which illustrated cumulative losses in excess of $40m.

[altiplano]

"business as usual"

Of course that is the public spin no matter what the contingency has or lacks. What else could he say? "Whoa shaat, we're fracked not sure what we're going to do?" Has to appear a non-event or people will be buying their NYC flights elsewhere until it gets sorted.

[mingshiyaaun]

Porter flights were selling for cheap compare to other airlines. Its a loss for the consumers.

[Takeoff OK]

Way to jump the gun there boys. This is still only a proposal. Until the court decides, nothing has changed, and I wonder at the likelihood of the government screwing UAL in favour of AA and VA.

[altiplano]

I think bankruptcy court stuff in the US is pretty much tear up your contracts and make the deals to sustain you/pay your bills 99% of the time. I guess we'll see...

[RVR6000]

To all those Porter doubters the company is in its 7th year now. Its paid its pilot's a decent salary, and treats its employees well.

Kudos to Porter

[Rogerdodger2]

Funny, I hear from pilots and management that have worked there that it looks good on the outside but it's shit show on the inside. Don't know for sure myself it's just what Ive heard.

[justwork]

Funny, I hear from pilots and management that have worked there that it looks good on the outside but it's shit show on the inside. Don't know for sure myself it's just what Ive heard.

Funny, I've worked there for nearly 3 years and it's far from a shit show. It's not perfect, but I would like to hear a place that is. Every year that I've been with Porter they have only improved working conditions. This has nothing to do with the EWR slots.

About the slots, 4 of our 26 EWR slots are leased. We lease them from AA, who sold them out from under us. Porter had/has a plan in place to maintain the EWR schedule.

[60N30W]

Funny, I hear from pilots and management that have worked there that it looks good on the outside but it's shit show on the inside. Don't know for sure myself it's just what Ive heard.

Rogerdodger2,

I will tell you one thing that is for sure, in aviation there is no greener grass anywhere....

Regards

[altiplano]

There is plenty of green out there, you just have to go over the right fences I guess...

[Valhalla]

Porter said it was profitable for all those years prior to their failed IPO attempt which illustrated cumulative losses in excess of $40m.

Just because YOU say it, doesn't make it true. But hey, Mark, since we're keeping score of who said what, you predicted Porter would never fly:

http://www.thebulletin.ca/cbulletin/con ... id=1000816

[Valhalla]

Funny, I hear from pilots and management that have worked there that it looks good on the outside but it's shit show on the inside. Don't know for sure myself it's just what Ive heard.

[Realitychex]

Porter said it was profitable for all those years prior to their failed IPO attempt which illustrated cumulative losses in excess of $40m.

Just because YOU say it, doesn't make it true. But hey, Mark, since we're keeping score of who said what, you predicted Porter would never fly:

http://www.thebulletin.ca/cbulletin/con ... id=1000816

As long as there is capital to underwrite losses and a willingness to do so, they can and will continue to fly.

The word "success" is bandied around very loosely in the airline business. Some people consider success as the ability to keep flying, regardless of economic results. Most people I know would define business success as indefinite sustainable profitability generating a return to investors higher than the cost of capital with growth prospects.

Porter's growth has virtually stopped, with Dec 2012 ASM growth about half of WJ's. Porter's Dec asm's were 90% of peak 2012 summer travel, compared to WJ's who's Dec asm's were 105% of peak summer 2012 travel.

It's a mortal lock Porter's investors didn't buy into the program with the expectation of having dead money for 7 years with very little prospect of seeing a return on the not insignificant cash outlay anytime soon.

I don't know anyone who'd invest in Porter given the history of losses, negligible growth and the inevitability of yields collapsing market by market as LCC competition expands, not to mention other issues that are forcing costs up year after year. Costs rising, yields dropping. Not a happy scenario for any airline, especially one that can't establish any track record of anything approaching sustainable profitability over its history. However, there are always dreamers and schemers itching to get involved in the airline business who haven't a clue how to analyze the business and will believe anything they are told.

The nature of advance bookings in the industry allows a business to almost uniquely be able to use tomorrows cash to pay todays bills.

I'm not in the YYZ market so I haven't seen what their current level of full page advertising is in the 3 papers. They were daily for the longest time. Let's face it. There isn't anyone in the Toronto market that hasn't heard of Porter, yet after 7 years, they are still struggling to achieve economic loads. What does that tell you?

So, from a business perspective, the venture, imo, doesn't have much going for it.

It's a great product though.

[Ivan42]

Porter said it was profitable for all those years prior to their failed IPO attempt which illustrated cumulative losses in excess of $40m.

So, from a business perspective, the venture, imo, doesn't have much going for it.

It's a great product though.

I don't understand why it doesn't though. They have a great location, a relatively low-cost fleet and operate on busiest air routes. In terms of service, they're one of the best, especially for a regional airline.

I think they have a lot of potential for reducing costs and increasing customer loyalty. Compared to other airlines, Porter's customer service front appears to be robustly staffed. From what I saw through December, they could easily cut 25% of that and not jeopardize service at all. A tiered rewards program or further linkages with other airlines, the tourism industry and business are all revenue opportunities. I don't believe that their potential has flat-lined. There's a lot of room for that airline to grow.

I don't know the industry though so I'm very interested in your thoughts.

I love Porter and hope that they can stick around as they are for a very long time.

[Realitychex]

It's fundamentally the same story that plagues most airlines. High unit costs and low unit revenues.

Porter banked on using their virtual monopoly at YTZ to be able to capture a very high proportion of high yield, utterly price insensitive passengers traveling on business from Toronto to Ottawa, Montreal, NYC, Boston, Chicago etc.

The Porter business plan likely figured, for example, that with 40% or less of the plane full of $629, (or more) one way fares from YTZ-BOS paid for by expense account Bay Street types, they'd be able to back fill another 20% of the capacity with discounted $150 fares to be "competitive" with existing operators and make a ton of money. By being on the Island, the other airlines wouldn't dream of matching them because it'd be too expensive for them to do so.

In the real world, they never got the proportion of high fares they expected and had to fill the aircraft with low fares to generate ridership, hoping that those people would eventually buy up to the high fares. Thus the reason for the never ending full page ads in the 3 Toronto papers flogging discounted fares like a LCC, except with unit costs dramatically higher than a LCC and with a very limited network to generate connectivity and further ridership.

Air Canada was able to get a few token slots at YTZ , but enough to put a decent sched between YTZ and YUL. By definition, that would have hurt Porter's yields, though the stimulation factor may have actually increased their loads in the short term. However, you can't lose a little on every passenger and make it up on volume.

EWR was likely the jewel in the crown for Porter with decent loads for them, but more importantly, decent yields. That all came crashing down in June 2012 when WJA added 8x daily YYZ-LGA with a LCC fare regime. The $600 walkup fares crashed to $249 or less, making it very difficult for Joe Baystreet to submit an expense claim for a r/t to New York for $1,500 when it was widely available for $600.

What's worse for Porter is the inevitability of LCC competition entering a number of high yield markets over the next 2-3 years and doing the same market by market by market, further emasculating Porter's already dodgy economics.

So, whilst Porter can be very proud of their product, the economics are nothing to get excited about. The shareholders have the choice of cutting losses and running, or doing what most airlines in this situation do. Stop growth and further capital expenditures, advertise the fertilizer out of the fares to generate advance bookings to pay todays bills from tomorrows revenue to cash flow the business and hope something / anything changes in the marketplace that results in a white knight investor coming along to buy them out of their problem.

There are buyers out there, if the price were right, which it is not given the utter lack of interest in the venture. Make no mistake about it. Porter has been shopped around for more than a couple of years. Porter's increasing levels of unionization makes it less and less palatable for a number of potential buyers.

I'll guarantee that if Porter were ever sold, within 12 months it would be a very different airline than what you see today. In order to make it sustainably profitable, the model will have to be dramatically changed.

[Mig29]

Realitychex,

It's none of my "business", but you seemed to be well informed about business side of aviation then an average/most pilots are Do you fly the line, or you are on the other side of the "fence" at WJ?

Cheers

[RVR6000]

Realitychex,

Maybe your efforts are better spent finding accommodation and transport for the new-hires coming to YYC on the 28th. Hey at least at Porter they pay for accommodation during initially training.

[Biff]

Realitychex,

Maybe your efforts are better spent finding accommodation and transport for the new-hires coming to YYC on the 28th. Hey at least at Porter they pay for accommodation during initially training.

Seriously, that's the best retort you could come up with??

LOL, now that's funny!!

[justwork]

Realitychex,

Maybe your efforts are better spent finding accommodation and transport for the new-hires coming to YYC on the 28th. Hey at least at Porter they pay for accommodation during initially training.

No we don't. Unless you're hired for YHZ or YOW base because the training is in Toronto.

[fingersmac]

Training is paid though.

[The Raven]

Realitychex,

It's none of my "business", but you seemed to be well informed about business side of aviation then an average/most pilots are Do you fly the line, or you are on the other side of the "fence" at WJ?

Cheers

Realitychex is the ex-VP at Westjet that was caught spying on Air Canada a few years ago.

[RVR6000]

Realitychex,

Maybe your efforts are better spent finding accommodation and transport for the new-hires coming to YYC on the 28th. Hey at least at Porter they pay for accommodation during initially training.

No we don't. Unless you're hired for YHZ or YOW base because the training is in Toronto.

Unless it has recently changed, if you weren't from Toronto they would give a hotel room for few days till you found a spot.

[midwingcrisis]

.....and speaking of Unionization

http://www.thestar.com/news/gta/article ... n-thursday