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ACE Aviation's Air Canada Jazz refused TCCA access

2006-07-26 18:26 ET - News Release

Ms. Janet MacDonald reports

TPA REFUSES JAZZ ACCESS TO TCCA WITHOUT SIGNED OPERATING AGREEMENT

The following letter was sent today to Joseph Randell, president and chief executive officer of ACE Aviation Holdings Inc.'s Air Canada Jazz, by Toronto Port Authority president and CEO, Lisa Raitt.

July 26, 2006

Mr. Joseph D. Randell

President and Chief Executive Officer

Air Canada Jazz

310 Goudey Drive

Halifax International Airport

Enfield, Nova Scotia

B2T 1E4

Dear Mr. Randell:

Re: Toronto City Centre Airport

I am writing in response to your letter to me dated July 7, 2006. You assert that Toronto Port Authority ("TPA") is acting contrary to the Canada Marine Act. As you know, that Act gives TPA the statutory authority to control access to the Toronto City Centre Airport and to determine the terms of its use by carriers. Any carrier wishing to use the TCCA must first enter into a contract with TPA providing for the terms of such access and use. A contractual relationship between TPA and each carrier is essential to TPA's ability to fulfill its statutory obligation to control, manage and operate the TCCA in a safe, efficient and business-like manner.

Any agreements or arrangements existing between Jazz or any of its predecessors and the TPA have terminated in accordance with their terms, and in any event notice of termination was given to you on February 28, 2006. We offered Jazz a new contract, which you rejected and are challenging in the Courts. We have been and continue to be ready, willing and able to contract with Jazz to permit its use of the TCCA in a manner consistent with its predecessors' use since 2004. Your proposed, unilateral plan to operate 34 flights per day is unacceptable because of agreements that TPA has made with Porter Airlines Inc. to ensure the financial viability of the TCCA. As you know, for many years TPA sought arrangements with Jazz or its predecessors which would have made the TCCA financially viable, but Jazz would not commit to such arrangements. There is nothing secretive about TPA's plans for commercial service at the TCCA. Our plans are to revitalize the TCCA, to encourage competition and to facilitate improved service to the public, through our arrangement with Porter and, hopefully, through an arrangement with Jazz as well.

We would like to remind you again of the context within which Jazz and its predecessors have operated at the TCCA. Prior to the public announcement on February 1, 2006 of the intention of Porter to make use of the TCCA for its new airline, Jazz and its predecessors:

allowed flight frequencies to decline from 27 daily round trips to an average of 4 or 5 daily round trips (Monday to Friday only);

allowed its facilities to become outdated;

reduced its physical presence (reduced its space);

terminated its routes to Newark, Windsor, London and Montreal;

discontinued access services (from bus to van to no courtesy transport from downtown Toronto);

reduced the frequency of its flights to and from its sole remaining Ottawa route and periodically shut down or significantly reduced its scheduled services;

allowed its lease with its airport landlord CCAL to expire in 2004;

refused to make immediate alternative facility arrangements with other airport based businesses when Porter indirectly purchased CCAL in 2005; and

flatly refused to participate in the revitalization of the TCCA by increasing its services despite the numerous requests of TPA.

The TCCA losses incurred by TPA over the past decade have been due, in large part, to the indifference to the TCCA shown by Jazz and its predecessors whenever it found itself as the sole operator there. We repeatedly sought to obtain a commitment from Jazz to appropriately utilize the TCCA, but without success. As a consequence, with your knowledge, TPA sought other carriers to fill the significant unused capacity of the TCCA. That initiative resulted in TPA entering into a long-term contract with Porter under which it has made the commitments to TPA necessary for its operation of the TCCA on a financially viable, self-sustaining basis; commitments which Jazz consistently refused to make.

In your July 7th letter, you refer to Air Canada's press release of February 2, 2006 advising that it would pursue a substantial increase in flight frequencies between the TCCA and Ottawa, as well as the reinstatement of flights to and from Montreal. You claim that the impetus was "the improved access to Toronto City Centre Airport". In fact, TPA publicly announced its plans to improve access to the TCCA with a new ferry and related infrastructure more than 5 months before, on August 5, 2005. It was not until the day after Porter's public launch announcement, on February 1, 2006, that Air Canada made its February 2, 2006 announcement suddenly expressing renewed interest in the TCCA. It appears that your actions concerning the TCCA since February, 2006 have little to do with improved access to the TCCA and everything to do with Jazz's overriding goal of eliminating or reducing competition from a new carrier.

We are puzzled by your statement that, after you were evicted from the CCAL facility, "despite repeated appeals to the TPA for assistance to accommodate Jazz, none was forthcoming". This is an incorrect statement. Although Jazz's predecessor had temporary lease arrangements since November 2004 and, in effect, a new landlord since June 2005, Jazz did not request TPA's assistance in locating an alternate location at the TCCA until after the announcement of Porter's new airline on February 1, 2006. Once you requested assistance, we spoke to Stolport Corporation (one of the two TPA tenants) on February 7, 2006, and discussed the possibility of Jazz leasing space from Stolport. In fact, Stolport approached Jazz regarding providing space as early as June 2005. We encouraged Stolport to communicate with Jazz and negotiate a lease arrangement, to be effective upon Jazz entering into a new contract with TPA. We spoke to Stolport again on February 12, 2006. We also requested CCAL to consider providing space to Jazz in the event that Jazz was unable to come to an agreement with Stolport. Indeed, CCAL offered leased space to Jazz. We understand that Jazz has now concluded a form of Sublease with Stolport for space needed to operate from the TCCA, again subject to Jazz entering into a contract with TPA. Stolport provided us with a copy of the form of Sublease on July 20. That contract which Jazz and Stolport propose to govern Jazz's tenancy arrangements consists of some 33 pages (excluding its 11 schedules), yet you assert that it is appropriate for Jazz to conduct commercial carrier operations at the TCCA without a contract with TPA.

We are concerned that Jazz is apparently selling tickets to members of the public for Jazz flights purported to be scheduled to depart from the TCCA commencing on August 28, 2006, when we have repeatedly told you that we will not permit Jazz to operate to or from the TCCA until you have entered into a contract with us. You take the position that Jazz has an existing contract with TPA, and we disagree. It is obvious that Jazz and TPA have strongly different points of view on this and other issues concerning our respective rights and obligations vis-a-vis the TCCA. Jazz has asked the Courts to determine those issues, and ultimately they will.

In the meantime, we are committed to facilitating a resumption of service at the TCCA by Jazz. We propose that Jazz agree, without prejudice to its rights and remedies in the lawsuits that it has commenced, and if necessary under protest, to abide by the terms of our contract offer previously made. This will allow Jazz to operate at a level which is consistent with the traffic which it generated since 2004 and indeed in excess of its operations at the TCCA prior to leaving in March, 2006, while preserving its ability to pursue its challenge to the propriety of those terms and other issues in the Courts. Without such an agreement with TPA, Jazz will not be permitted to access the TCCA or use any of its facilities. Please let us know if you will accept our offer, so that we may proceed to jointly determine an appropriate start date taking into account the scheduling for completion of TPA's new infrastructure construction and related passenger safety issues.

Yours truly,

TORONTO PORT AUTHORITY

Lisa Raitt

President and Chief Executive Officer

cc: Scott Tapson, Vice President, Customer Experience - Air Canada Jazz (via facsimile)

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Guest rattler

Sounds like the Harbour Authority wants ACE to guarantee that Porter will be left alone. (note service limits). Strange for an airport authority to be getting directly involved in a marketing battle between 2 airlines. Surely if Porter provides a superior product the public will support them (or not).

Re Porter, does anyone know when they will take delivery of and register their aircraft as belonging to them? Any idea on the progress re the OC? I have yet to see any application for the right to sell seats prior to the granting of their OC and Licence to the CTA? Normal practice, if they are sure they will be operating this fall would be to ask the CTA for a let to sell their service in advance of licence / OC so as to be able to generate advance revenue and create customer interest/commitment for their launch.

Their last press release on the subject was June 27 and it still talked about "early fall" which is not that far away.

I hope they meet that commitment and have a smooth startup.

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The port authority is not going to allow Jazz to swarm the airport for no other reason than smothering Porter Airlines.

If the port authority believed that Jazz seriously desired to opperate forty flights a day out of the island with or without Porter they would be bending over backwards to accomodate Jazz. But it does nothing to help the airport if they allow Jazz to smother Porter only to once again abandon the airport in light of the significant investment made in the airport by and for Porter.

It is like a guy walks into a gun shop talking about killing his wife and asking for every gun in stock. It is obvious that nothing good can come of aiding that individual.

I would love to see Jazz show a sincere interest in the island, when properly served there is a market there. But everything Jazz has done in the last five years indicate only a desire to sabotage the island airport and anyone who intends to service it.

---

I might be wrong, but I believe two Porter Q400's have been built. I believe they are C-GLQB and C-GLQC. I can't confirm that though.

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The port authority is not going to allow Jazz to swarm the airport for no other reason than smothering Porter Airlines.

If the port authority believed that Jazz seriously desired to opperate forty flights a day out of the island with or without Porter they would be bending over backwards to accomodate Jazz. But it does nothing to help the airport if they allow Jazz to smother Porter only to once again abandon the airport in light of the significant investment made in the airport by and for Porter.

It is like a guy walks into a gun shop talking about killing his wife and asking for every gun in stock. It is obvious that nothing good can come of aiding that individual.

I would love to see Jazz show a sincere interest in the island, when properly served there is a market there. But everything Jazz has done in the last five years indicate only a desire to sabotage the island airport and anyone who intends to service it.

---

I might be wrong, but I believe two Porter Q400's have been built. I believe they are C-GLQB and C-GLQC. I can't confirm that though.

Why do you steadfastly refuse to recognize that the Port Authority has taken steps to upgrade access to the island, making it a more attractive proposition now than it was five, four, three, two or one year ago?

You give a nice analogy, but I see it more like a guy who hung trying to run a little storefront business from a tenament as best he could, only now to be evicted because the landlord decides to spruce up the place, make it more appealing to customers, so he can bring in a new business with whom he has struck a sweetheart deal. Obviously if the landlord had spruced up the place five years ago the original business would have expanded because the building would have attracted rather than repelled visitors. As one who walked the tarmac at TCCA on a snowy afternoon from that ramshackle terminal, served by that rinky-dink ferry, I know of what I speak.

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I can't believe for a second that you are that naive,

If access to the airport was such a major issue for Air Canada Jazz, why did Jazz sabotage the Toronto Island Bridge before the 2003 civic election by publically claiming they wanted to opperate the BAe-146 from the island knowing that would appear to confirm the crap Miller was spouting about the dangers of airport expansion.

It was more dishonest in at that time few to none (depending on who you ask) of the BAe-146's being opperated by Jazz were in good enough condition for short-field opperations.

Either Jazz employs the stupidest communications people on earth - or it was a calculated attempt to sabotage the airport.

but I see it more like a guy who hung trying to run a little storefront business from a tenament as best he could,

He should have signed a lease instead of taking his chances renting month to month. A company I used to work for that was renting its office space month to month got evicted when the Calgary real estate market began to heat up and another company came along ready to sign a ten year lease. Like Jazz they had previously refused to enter into a new contract and like Jazz they got kicked out.

But unlike my former employer - we didn't have other space available to us in the same complex.

The Toronto Port Authority and Jazz were in an "at will" relationship. When a contract comes to an end and the parties to the contract decide to go on as they had opperated under the contract that usually puts them in an "at will" relationship.

Thus either party can terminate the relationship at any time without consequence.

If Air Canada so valued their place at YTZ they could have entered into a new agreement with the TPA. They elected not to and thus had no claim that they were entitled to airport access.

At the time I pointed out that Jazz could take their business to stolport - but with Jazz ending service entirely Jazz exited the "at will" relationship with the TPA.

The TPA is happy to take Jazz back - but they are not going to give Jazz a free hand to sabotage Porter who is the first airline in 15 years to have a legitimate interest in opperating form the airport.

Many airports take measures to protect their dominant carrier from hit and run attacks by their competitors. Why throw down the red carpet for a carrier who has only come to town to attack your best customer and will leave town as soon as their done.

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I seem to remember Joe Randell crying wolf just before the Mayoral election where he wrote a letter claiming 'RJ's' would service the Island and never persued this like Deluce. Perhaps the TPA is holding a grudge over their bridge?

Can't view this for a few days, I'm off with the family to go sleep on a rock...er, I mean go camping, have a good weekend.

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Guest rattler

Super80: thx for the info re the aircraft. The TC website shows that they are both still registered as belonging to Bombardier though. I understood that crews were being trained, are they using loaners from Bombardier or just not at the hands on actual aircraft stage yet?

Again sure hope the start up is smooth and that the island service and those wanting to fly out of there will have two choices.

I do however still think that the TPA should back off as they could find themselves in court over their stance on limiting AC. Now if it was due to slot times / lack of gates, then of course they would have no problem but I suspect that is not the case.

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TPA doesn't really pass the smell test . It was pretty clear the TPA was putting the screws to AC of rent and counter space, basically to force them out. In the USA there would be an anti-trust issue I think. This will devolve to lawsuits and worse. blink.gif

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Since when has the TPA taken over the role of the Competition bureau?

Agreed. The airport is open for equal access to all.

If Porter has an issue, they apparently have the pockets and the time to go thru the Competition Bureau if they feel ACE is offside.

Matching fares and frequency is not anti competitive.

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Guest rattler
If Porter approaches the TPA in good faith the TPA will bend over backwards to make Jazz feel right at home.

??? icon_question.gificon_question.gif

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  • 2 weeks later...

Jazz Air, ACE Can't Resume Toronto City Centre Service

Tuesday August 08 2006 - News Release

Mr. Joseph Randell of Jazz Air reports

AIR CANADA JAZZ FORCED TO DELAY THE REINSTATMENT OF SERVICE AT TORONTO CITY

CENTRE AIRPORT DUE TO THE TORONTO PORT AUTHORITY

Jazz Air Income Fund and ACE Aviation Holdings Inc.'s Air Canada Jazz has

been forced to delay plans to reinstate scheduled service on Aug. 28, 2006,

at the Toronto City Centre Airport due to the intransigent actions of the

Toronto Port Authority (TPA). The TPA has refused to approve the sublease

between Jazz and Stolport Corp., thereby preventing Jazz from securing

facilities from which to operate. The TPA has refused to allow Jazz to

reinstate service at the airport unless it agrees to a secret commercially

restrictive commercial carrier operating agreement (CCOA). Jazz regrets

having to take this action and the inconvenience caused to its customers.

For the last 16 years, Jazz has operated at the Toronto City Centre Airport

under a CCOA that was signed in 1990, and renewed in 1995. Though by its

terms, it would have expired in 2000, Jazz and the TPA had been operating

under the same agreement until Jazz was forced to suspend service on Feb. 28,

2006. The TPA unilaterally contends that the agreement will terminate on Aug.

31, 2006. From a regulatory perspective, a CCOA is not necessary to establish

scheduled service at a Canadian airport. In fact, Jazz operates to 56

airports throughout Canada where the vast majority do not have a requirement

for an operating agreement or a CCOA and not one seeks to impose confidential

commercial restrictions like those required by the TPA.

"We have repeatedly told the TPA that we'll not stand victim to the

commercial regulation and limitations they seek to impose on our operations

at the Toronto City Centre Airport," said Joe Randell, president and chief

executive officer, Air Canada Jazz. "The conditions the TPA seeks to impose

through the proposed CCOA violate the TPA's legal obligations under Section

50(1) of the Canada Marine Act and are well outside the norms of the aviation

industry. In the interests of accountability and transparency, Jazz calls on

the TPA to lift the shroud of secrecy it has imposed on the CCOA and make the

agreement public."

Jazz's services were temporarily suspended on Feb. 28, 2006, when it received

a termination notice from its landlord, City Centre Aviation Ltd. At that

time, Jazz repeatedly appealed to the TPA for assistance and none was

provided. This is unlike other airports, which seek not only to retain but

also to promote and grow services. In July, Jazz was successful in securing

new facilities from Stolport Corp. and, based on that arrangement, had

announced in Stockwatch on July 6, 2006, that it would resume and enhance its

service from the Toronto City Centre Airport on Aug. 28, 2006. The TPA has

since refused to approve Stolport's sublease of space to Jazz to allow for

the restart of service.

"The actions of the TPA breach its obligations under federal law and are so

contrary to industry practice that they were virtually inconceivable when we

announced the recommencement of services on July 6," Mr. Randell added. "Here

we have the unprecedented situation where a long-term operator is having to

do battle with the management of an airport simply to resume a long-standing

service and remain its customer. It is obvious that by denying Jazz fair and

equal access to these public facilities, the TPA has decided to create a

virtual monopoly on behalf of a single corporate interest. In fact, by the

TPA's own admission in a letter publicly released on July 26, 2006, the

authority has entered into an agreement with another airline which limits the

activity of carriers at Toronto City Centre Airport except one."

As a result of today's announcement, customers are no longer able to purchase

seats on this service and Air Canada and Jazz are taking the necessary steps

to ensure that those customers who have already booked their travel are given

the option to fly from an alternate location, Pearson International Airport.

Customers who have booked service to and from the Toronto City Centre Airport

as of Aug. 28, 2006, may also obtain a full refund.

"We sincerely apologize to our loyal customers and our dedicated employees

who have put their support behind the reinstatement of this service," said

Mr. Randell. "Jazz will continue to pursue this matter through all

appropriate avenues, including through the courts, and remains committed to

returning to the Toronto City Centre Airport as soon as possible."

2006 Canjex Publishing Ltd.

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The federal government has lined up behind the TPA on this. They are within their rights to force Jazz into an agreement if they wish to resume service to the island.

They have the right to waive that requirement as they had in the past - but they also have the right to enforce it.

As Jazz is acting in bad faith in this matter, it is in the interest of the TPA to seek contractual protections against a hit and run attack by Jazz.

Jazz comming to the island, smothering Porter and then once again abandoning the airport would be unacceptable in light of the significant investment made in the airport.

If Air Canada acted in good faith this fiasco never would have developed.

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The federal government has lined up behind the TPA on this. They are within their rights to force Jazz into an agreement if they wish to resume service to the island.

They have the right to waive that requirement as they had in the past - but they also have the right to enforce it.

As Jazz is acting in bad faith in this matter, it is in the interest of the TPA to seek contractual protections against a hit and run attack by Jazz.

Jazz comming to the island, smothering Porter and then once again abandoning the airport would be unacceptable in light of the significant investment made in the airport.

If Air Canada acted in good faith this fiasco never would have developed.

Each sentence in your pathetic little rant is an assumption.

Go to Google Earth, Google Toronto, and you can see why it's time to bull-doze this insanity and make a beautiful urban park out of it.

Enough is enough. The TPA is out of control, and the federal investigator will soon be report. Then the bell will toll for Lisa Raitt, for the Deluce family. Those are my assumptions.

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Actually, I know all of what I wrote first hand - including that Jazz is acting in bad faith.

Jazz is going to come around on this. If the market develops they won't be able to afford not too.

Anyway...

Do you have any idea how difficult and expensive it is to decommision an old airport site?

They would practically have to dredge the island out of existance, many old airports remain open for no other reason than cleaning up the site is too daunting a prospect.

The only insanity that should be bulldozed is the squatters on the islands who are going to hold the entire Toronto waterfront hostage for the next generation unless something is done about them soon. Just look at "The Docks" fiasco.

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Actually, I know all of what I wrote first hand - including that Jazz is acting in bad faith.

Jazz is going to come around on this. If the market develops they won't be able to afford not too.

Anyway...

Do you have any idea how difficult and expensive it is to decommision an old airport site?

They would practically have to dredge the island out of existance, many old airports remain open for no other reason than cleaning up the site is too daunting a prospect.

The only insanity that should be bulldozed is the squatters on the islands who are going to hold the entire Toronto waterfront hostage for the next generation unless something is done about them soon. Just look at "The Docks" fiasco.

Decommission an old airport? Not as hard as decommissioning the old Ataratiri site east of downtown. Not as hard as building the Expo 67 islands in Montreal. Not as hard as building that 10 kilometre tunnel to expand the Niagara Falls generating station. Get it done.

I would, however, evict the residents of Toronto Island and industrial tenants of Leslie spit leave. I'd make Hamilton the port for Toronto.

Then I would expand Leslie spit through a landfill process, taking the rock from Niagara if necessary.

And I would make a massive, world class urban park out of the Islands.

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That's the perennial excuse - why nothing gets done. No vision. You tie the project to the 2015 world's fair and old waterfront promises. You find some corporate sponsors to ante up 10% of that in naming rights for various key, permanent structures. If they want to rename Leslie Spit the Nike spit, just pony up $100 million over 20 years.

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That will never happen, all that is going to happen to the Toronto Waterfront is commercial development on the mainland and angry squatters on the islands fighting it every step of the way with the enthusiastic support of City Hall.

The airport is not going to close in my lifetime and I have a good forty years ahead of me.

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Guest rattler

Jazz has dropped its lawsuit against Porter et-al.

Doesn't say anything about the Port Authority though.

Attention News Editors:

Porter Airlines announces that Air Canada Jazz has discontinued its legal action against the new carrier

TORONTO, Aug. 8 /CNW/ - Porter Airlines announced today that on August 8,

2006, Jazz Air LP chose to discontinue its legal proceedings against Porter.

On March 9, 2006, Jazz Air LP had commenced an application with the

Federal Court of Canada claiming, amongst other things, that the Toronto Port

Authority (TPA) had entered into agreements and made arrangements with Porter

Airlines that were unlawful. In this proceeding, Jazz Air LP sought to set

aside Porter Airlines' arrangements with the TPA.

On June 6, 2006, the Federal Court struck out Jazz Air LP's Notice of

Application as irregular with leave to file a statement of claim. Jazz Air LP

appealed. The Federal Court dismissed Jazz Air LP's appeal on July 20, 2006.

"Porter is willing to make the type of long-term commitment to the

airport that Air Canada never has," said Robert Deluce, president and CEO of

Porter Airlines. "In order to help make the Toronto City Centre Airport (TCCA)

financially self-sustaining, Porter has signed a long-term commercial carrier

operating agreement. We are the only scheduled airline in the last 20 years

willing to make TCCA its operating base."

Porter has announced that it will begin 10 daily weekday round-trip

flights to Ottawa in the fall, and will announce its schedule, fares and start

date in the coming weeks.

About Porter Airlines Inc.

Porter Airlines Inc. is a regional passenger carrier that will operate

out of Toronto City Centre Airport. The airline will begin scheduled service

in 2006 to short-haul Canadian and U.S. destinations within a 500-nm radius of

the Greater Toronto Area. Porter is a subsidiary of privately-held Porter

Aviation Holdings Inc. Visit www.flyporter.com for more information

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