Four years later, Porter launches Toronto service

 - November 8, 2006, 6:34 AM

It took some deft political maneuvering, arm-twisting, wheeling, dealing and more than anything a lot of waiting, but Porter Airlines finally got airborne on October 23 from Toronto’s controversial island airport amid fierce opposition from environmentalists and Air Canada Jazz.

The first service, aboard a new 70-seat Bombardier Q400 turboprop, connects Toronto City Centre Airport and the Canadian capital Ottawa 10 times each weekday and twice each Saturday and Sunday. A reeling Air Canada Jazz, meanwhile, finds itself on the outside looking in, effectively banished from the airport when fellow Porter Aviation Holdings subsidiary City Centre Aviation served it with an eviction notice to make way for the new airline.

When Porter CEO Robert Deluce launched the plan to start a new airline from the island airport in 2002, he knew it would take some time and effort to reach fruition. After all, his original plan called for a bridge to the environmentally sensitive island, and community opposition enjoyed some fairly influential backing. But never did Deluce dream that it would take more than four years for the service to finally take off.

Of course, at the time he couldn’t have expected the city council to
revoke an approval for the bridge, particularly after the Toronto Port Authority (TPA) had already received federal permits and spent at least C$6 million of the estimated C$48 million needed to complete the project. But soon after mayor David Miller took office in December 2003, the council voted to do just that, prompting Deluce to file a lawsuit against the city that accused the mayor of coercing council members to reverse their positions by threatening to exclude them from key council committees and other posts. 

Two years later, Porter settled with the city and unveiled a revised plan to link the island with a new ferry, terminals and related infrastructure, paid for by the Toronto Port Authority. In response, Air Canada said it would reinstate Air Canada Jazz turboprop service from the island to Ottawa and Montreal on August 28, using facilities subleased from Stolport. Unfortunately for the Canadian flag carrier, the Toronto Port Authority denied its sublease application, prompting Jazz to file a complaint in federal court, alleging that the authority has discriminated against Air Canada Jazz by granting Porter Airlines a monopoly over the Toronto City Centre Airport market.

Last month Air Canada Jazz president Joe Randell traveled to Ottawa to protest a previously confidential C$20 million settlement paid in 2004 to Porter and the Toronto Port Authority to compensate for the bridge cancellation and help nurse the ailing TPA back to health.

All told, including C$15 million granted to the Port Authority for a new ferry, terminals and related infrastructure, the project received some C$35 million in subsidies. The Canadian transport department commissioned a review, due for release by the end of the month, of the TPA’s activities. Randell has asked that the investigation include a probe into the C$20 million settlement.

If not unfazed by the most recent attempts to derail the operation, Deluce certainly knows how to fight back. And now, after more than four years of mighty struggle, he too enjoys the backing of an influential ally in former American Airlines CEO Donald Carty, who earlier this year agreed to become chairman of Porter’s parent company, then called Regco Holdings but since renamed Porter Aviation Holdings.

Porter’s management team includes COO James Morrison and CFO Paul Moffat. Morrison, who last served as vice president and general manager of Execair after stints with Skyservice FBO, Air Creebec and Air Ontario, will oversee the airline’s flight and ground operations, maintenance and engineering teams. Moffat was a partner in one of Canada’s largest architectural firms, Bregman & Hamann, and served as vice president and CFO of Lac Minerals, The Citadel Insurance and Canadian Niagara Power before joining Prudential of America Life Insurance Company (Canada) in 1994 as its CFO and chief compliance officer.

Plans call for Porter to serve at least 17 cities within a 500-nm radius of Toronto with its first batch of 10 Q400s. Montreal ranks high on the list of likely follow-up cities, as do New York, Washington D.C., and Detroit. Porter holds options on another 10 Q400s, delivery of which would extend into 2008 if the airline chooses to exercise them.

Porter plans to distinguish itself with an upscale image at a time the prevailing philosophy of start-up airlines calls for low costs and no frills. Flying turboprops, particularly in North America, still presents its marketing challenges, regardless of how quiet and comfortable the Q400 may be. So instead of enduring the usual cattle drive at a discount-fare airline’s terminal, all Porter passengers get access to its Internet-equipped business lounge at Toronto City Centre and free shuttle service to the ferry from the center of town. The airline also serves free snacks, beer and wine in its leather-clad Q400 cabins and in the lounge.