Toronto-based Porter Aviation Holdings announced this week that it has decided not to proceed with a proposed $120 million IPO 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.”
The airline decided to suspend the offering rather than lower its price to a level it considered too far below the original target of between $6 and $7 per share.
Porter Aviation Holdings submitted a preliminary prospectus in April advertising its “significant growth” since its inception on Oct. 23, 2006. Now Canada's third largest airline, it just took delivery of its 20th Bombardier Q400 turboprop in late April and its network covers some of the busiest destinations in southeastern Canada and the northeast of the U.S.
Although it reported a $4.6 million loss last year on $151.2 million in revenue, it turned a small profit in the fourth quarter as it generated a 50.2-percent load factor. This year's first quarter load factor reached 47 percent, compared with 41.3 percent during the same period a year earlier. It finished the first quarter with 103.8 million revenue passenger miles, compared with just 41.9 million a year earlier.
In March, Porter opened a new passenger terminal at Billy Bishop Toronto City Airport designed to accommodate two million passengers a year. Associated infrastructure includes four hangars, a corporate flight center, office space, ramp handling and fuel facilities. Air Canada last flew from Toronto City Airport in 2006, when City Centre Aviation-a company controlled by Porter Airlines founder Deluce-evicted it from the island airport. Since then Porter has flown from the downtown field unopposed.
Air Canada has filed a lawsuit against the Toronto Port Authority “seeking fair and equal access to a federally owned and operated facility.” Although the Port Authority intends to grant more slots from the airport, it plans to “grandfather” Porter's right to its existing 100 slots and issue half of 92 new slots to the incumbent airline, leaving only 46 slots for Air Canada and any other airline wanting to fly from Toronto City Airport. Air Canada has twice requested 74 slots, for 15 proposed round-trip flights to Montreal and Ottawa and seven round trips to Newark, N.J.
Air Canada in late March won approval to plead its arguments in federal court, which has scheduled a hearing of the case for July 6 to 8.