Jazz has 1 month to sue for YTZ access

[CanadaEH]

Jazz Air Has Month to Sue for Toronto Airport Access (Update2)

By Joe Schneider

June 14 (Bloomberg) -- Jazz Air, a unit of ACE Aviation Holdings Inc., has 30 days to sue the Toronto Port Authority and rival Porter Airlines Inc. or lose its fight to regain access to the downtown Toronto airport, a Canadian federal judge ruled.

Judge James Hugessen in Toronto issued the ruling yesterday, ending Jazz's effort to get a judgment in its favor without a trial. Jazz hopes to invalidate an agreement between Porter and the Port Authority, operator of the airport, limiting access by rival airlines.

Jazz ``shall within 30 days serve and file a statement of claim'' naming the Port Authority and Porter, ``failing which the application shall be dismissed with costs,'' Hugessen wrote in a 23-page ruling.

The decision ends Jazz's effort to return to the airport without having to disclose documents the Port Authority says will show the airline planned to stop service before its lease was canceled. If Jazz sues, it will have to turn the information over to the defendants as part of pretrial fact-gathering.

Jazz, a regional carrier that flies for Air Canada, the country's biggest airline, stopped flying to the airport in February 2006 after its lease was canceled. It was displaced by newly formed Porter Airlines, a unit of Regco Holdings Inc., under the agreement with the Port Authority.

Jazz doesn't want to hand over documents to Porter and the authority because ``we will find out what Jazz was planning,'' Port Authority lawyer David Scott said at a May 9 hearing.

`Planning to Exit'

``They were undoubtedly planning to exit the airport,'' Scott said. The carrier changed course because Porter moved in, he said.

Porter's agreement bars regional carriers, including Jazz, from flying between the airport and New York, Chicago, Boston, Washington, Philadelphia, Cincinnati, Detroit and Cleveland, Jazz's lawyer Earl Cherniak said at the hearing. It limits Jazz to 10 flights a day.

Jazz was flying only between Toronto and Ottawa before canceling. It had cut flights to Montreal; Windsor, Ontario; London, Ontario; and Newark, New Jersey. The Port Authority said it made the deal with Porter to ensure future airport operations.

A federal judicial officer ruled a year ago that the dispute should be resolved at a trial. Jazz appealed that ruling and lost. Jazz then withdrew the first request for a federal review and submitted a second, which was rejected by judicial officer Martha Milczynski. She said the action was ``improper and undermines the integrity of justice.'' Jazz again appealed, leading to yesterday's ruling by Hugessen.

`Misguided Strategy'

Besides ordering a trial, the judge scolded Jazz for refilling the case, calling it a ``misguided strategy'' for which the carrier should be penalized.

Jazz said in a statement yesterday it is ``gratified that the case will be heard based on the merits.'' Spokeswoman Debra Williams today declined to comment on the judge's order.

``They're right back to where they were a year ago,'' Porter Chief Executive Officer Robert Deluce said today by telephone. ``If they just would've proceeded on that track a year ago, they would've saved themselves a lot of time, effort and money.''

Deluce said his company has spent more than C$1 million ($940,000) on legal fees in the dispute. He said he expects the court to order Jazz to pay his company a ``substantial'' portion of the legal fees.

Williams declined to say how much Jazz has spent on legal bills.

Jazz Air Ownership

ACE Aviation owns a majority stake in Jazz. The rest is owned by Jazz Air Income Fund and is traded on the Toronto Stock Exchange. Jazz Air Income Fund shares fell 8 cents to $8.37. ACE Aviation shares rose 8 cents to $26.08.

The airport, formally the Toronto City Centre Airport, is on a Lake Ontario island in Toronto's harbor. It can accommodate nothing larger than turboprop planes with a 575-mile range. It takes about six minutes to travel to the airport by car from Toronto's financial district.

The area's larger regional airport is Lester B. Pearson International, in the suburb of Mississauga. It can take about an hour during rush hour to get between there and Toronto by car.

The case is Between Jazz Air LP and Toronto Port Authority, T-1427-06, Federal Court of Canada (Toronto).

[CanadaEH]

Jazz doesn't want to hand over documents to Porter and the authority because ``we will find out what Jazz was planning,'' Port Authority lawyer David Scott said at a May 9 hearing.

Sounds eerily similar to another court case involving one airline and another.

[Super 80]

Porter already has some corraspondance between Jazz and City Centre Aviation that lays bare their intentions for the island, including a specifically damning email in which a Jazz manager discusses how he understands the legal relationship between Jazz and City Centre Aviation. These were email messages between Jazz employees Scott Tapson and Isabel Myler in June of 2005.

Jazz knew in December of 2005 that they were about to be evicted by Deluce, and all they asked for was for a little extra time, additionally they rebuffed offers of space by Stolport and other space owned by Deluce. Don Thune, the real estate manager for Air Canada Jazz requested that they be granted access until March 18th.

This internal understanding of the situation within Jazz is contradicted by their February 2006 court filings.

However at the end of the day this is going to come down to Jazz and their refusal to enter into a CCOA with the TPA. They can't claim they are being refused access when they have not met the requirements to secure access, especially when the TPA has a CCOA with Porter and has demanded a CCOA with US Airways should they begin service.

[IFG]

Jazz's Spin (CNW link ref'd by dagger in another thread as "Score one for Jazz over Porter" ...):

Air Canada Jazz Issues Statement Regarding the Federal Court's Decision

Neither the facts referred to here, nor Judge Hugessen's comments quoted in the Bloomberg piece above, reconcile easily with much of the other commentary we've heard about Porter & Jazz, related to TPA ? Vsplat? dagger?

Cheers, IFG

[Fido]

So if TPA and Porter have these e-mails between two Jazz employees then why do they need Jazz to produce them? Could it be that they obtained them illegally?

Why would Jazz sign a CCOA that effectively cuts their nuts off? It restricts their ability to operate in competition.

If Porter has this ability to prevent 'regional carriers' from operating to most of the Northeast USA, did they forget to include Pennsylvania and thus USAirways is restricted to just that one state?

[Super 80]

Deluce was their landlord on the island, much of it is communication between Jazz and City Centre Aviation. The only thing Jazz was evicted from was the main terminal on the island that was owned by Deluce that was to be refurbished for Porter. Jazz rebuffed offers of space by Stolport and also refused an offer of space to the west of the terminal.

As far as anyone at Jazz was concerned this was the end of it and good riddance. Jazz ended their presense on the island and in leaving also ended the "at will" relationship they had with the TPA following the expiry of their last CCOA with the TPA.

Accepting the offer that has been on the table since last summer doesn't do Jazz any harm. The interm offer that the TPA has made allows Jazz to resume service "without prejudice" to their legal claims. So they can answer Porter and still continue getting laughed/yelled at in the courts.

Jazz is currently in a position where they are claiming they have been denied access to the island, when Jazz themselves are the party refusing to enter into the agreement that would enable access.

According to the rules govering the TPA, the slots at the airport are to be allocated on a "use it or lose it" basis. If Jazz had the CCOA that secured them access to the airport they would have an avenue to secure additional slots as any slot not in use can be requested. Without a CCOA they have no more standing than the crazy guy who is throwing beer bottles at the ferry.

The TPA has always wanted Jazz on the island, they offered Jazz the deal that Deluce took first and many times. They are however not going to enable a hit and run attack that would threaten the airport. Their first responsibility is the financial viability of the port of toronto no a economics 101 blackboard perfect competitive market.

[UpperDeck]

Come on guys. Hold his feet to the fire!! Dagger was very dismissive of any suggestions that Jazz was standing on thin ice in its claims against the Authority. When do we hear the concession speech; "Okay--I was wrong."?

Yeah---I know---something about the nether regiions freezing over.

[dagger]

Come on guys. Hold his feet to the fire!! Dagger was very dismissive of any suggestions that Jazz was standing on thin ice in its claims against the Authority. When do we hear the concession speech; "Okay--I was wrong."?

Yeah---I know---something about the nether regiions freezing over.

Did the court rule on the substance or have I missed something? Oh, you're just blowing smoke out of your ass.

[Super 80]

Unless the next judge happens to live in the Toronto Islands, exactly what outcome are you anticipating?

- There is no obligation carrying relationship between the TPA and Jazz.

- Jazz ended the previous relationship and has refused to enter into a new one.

- The requirements of the TPA for entering into a relationship (the CCOA) that Jazz rejects are drawn from federal law.

- Every other opperator on the island has a CCOA, and other potential opperators have been informed of the CCOA requirement.

Even without that, given the strong history of bad faith conduct on the part of Jazz against the TPA and TCCA, six months of email between Jazz, Jazz and Deluce's brother and Jazz and the TPA that contradicts the claims made by Jazz in 2006 and no doubts claims to be made in the comming weeks.

On top of that, the last year of legal bullshit was a ploy to avoid the above.

All that is going to come out of this is another "Naughty Word" off judge and another certified cheque for Porter. This stunt has done alot of harm to Air Canada's credibility not only with the courts, but also the DOT in the United States.

[UpperDeck]

Did the court rule on the substance or have I missed something? Oh, you're just blowing smoke out of your ass.

Blowing smoke? Tell you what. You point out where I've been mistaken in a "legal prediction" or analysis and I won't hesitate to admit my error---but you'll be searching for quite a while. If there was any error, I'd no doubt acknowledge my mistake before anyone else even knew of it

Take the time---go back to the earlier thread on the issue and compare our remarks. Someone was blowing smoke, as you say---but it wasn't me.

[Thebean]

Blowing smoke? Tell you what. You point out where I've been mistaken in a "legal prediction" or analysis and I won't hesitate to admit my error---but you'll be searching for quite a while. If there was any error, I'd no doubt acknowledge my mistake before anyone else even knew of it

Take the time---go back to the earlier thread on the issue and compare our remarks. Someone was blowing smoke, as you say---but it wasn't me.

Who really cares what Jazz's plans were a few years ago? It doesn't matter.

The airline industry is a competitive business. Airlines make changes to routes / planning on an on-going basis. It is a function of what's going on in the marketplace. The assets are redeployable.

If I had a nickle for every time I could illustrate airlines redeploying assets in response to competitive pressures in the industry, I'd have an Aston Martin in my driveway a week from now.

To have a taxpayer funded organization making decisions as to who has access to the facility and restricting competition is outrageous.

This case wouldn't make it to square one in the US.

[DEFCON]

This whole issue is just another example of AC's lack of business sense. AO had the Island all sowed up and AC blew it! As was / is their normal business model and practice, AC attempted to force round pegs into square holes and now whines like a stuck pig!

I hate to say it but, AC is a dinosaur and it should be extinct. Their constant bully / meddling tactics do not make good business and only serve to reduce the potential of those that wish to run a money making operation. When Milton leaves with his millions and the place goes bust again I can only hope that like the Tower of Babel, AC gets broken up into many little pieces and thereafter only serves as a business school model of how not to do things!

[Super 80]

To have a taxpayer funded organization making decisions as to who has access to the facility and restricting competition is outrageous.

This case wouldn't make it to square one in the US.

Somewhere in the first several lines of every mandate of every airport opperator on earth outside of Zimbabwe is a responsibility to ensure the viability of an airport. Enabling hit and run attacks against their primary tennant usually undermines that goal. In the United States an attempt by the Justice Department to do after the relationship between AA and DFW failed, and at that time Delta was still opperating a hub at DFW.

None the less, the TPA even after a decade of Jazz and Proto-Jazz bullshit, sabotage and neglect offered Jazz a greater number of slots than they had at the time they left the island and the rules govering the TPA require that slots be granted on a "use it or lose it" basis" meaning if after a given time Porter is not using a slot, Jazz can request it. If Jazz actually had a CCOA they would have a case if they were being denied a given slot.

And in any event if Jazz really wanted to hurt Porter all they need to do is match the flights that are going out nearly full. They don't need to match the mid-day flights that barely break even. The primetime flights are also the ones that carry the government pax who are flying on not significantly discounted full fare tickets.

Without a CCOA and therefore any relationship with the TPA they are not entitled to anything and really don't have any basis to challenge any agreement pertaining to the TPA. They have as much standing as the crazy guy throwing beer bottles at the ferry.

I don't really know what Jazz is thinking, I don't think at the end of the day Air Canada really wants back on the island, they just want to wreak as much damage as possible from the shore.

[Guest rattler]

Super80: up to this point I followed your thinking re Jazz and Porter but you last statement left me behind

None the less, the TPA even after a decade of Jazz and Proto-Jazz bullshit, sabotage and neglect offered Jazz a greater number of slots than they had at the time they left the island

How indeed did Jazz sabatoge the TPA????? Schedules are normally based on passenger and not airport operating demands. During the time Jazz was there, was anyone else (major) interested or am I correct in my belief that until Porter came on the scene, Jazz (AC) was the only major operator interested in the Island. You are much closer to the action than I am so I am very interested in learning more.

Cheers Rattler

[Super 80]

I would call Air Canada making public statements to confirm the claims Miller had been making about the airport sabotage, seeing as his election led to the termination of the bridge that was already under construction.

Days before the 2003 local elections in Toronto after Miller had been scare mongering about the Island Airport and the bridge, saying among other things that 727's would be opperating in the middle of the night, Air Canada Jazz publically annouced that they wanted permission to opperate jets out of YTZ.

This was orchestrated by an ex-Air Canada communications executive who now works for Miller who asked his ex-employer to make a public statement requesting permission to use jets at YTZ. Air Canada was all too happy to oblige.

However in 2003 Jazz had no jet aircraft capable of opperating from YTZ, the runway is too short for the CRJ and the BAe-146's would have required new engines to be used for STOL opperations and were already being retired.

[J.O.]

If that isn't sabotage, then I don't know what is...

[Guest rattler]

All, as always, is in the "eye of the beholder". As far as AC

Air Canada Jazz publicly announced that they wanted permission to operate jets out of YTZ.

perhaps that is / was their desire and was needed to generate profits on the route or maybe (big bad) was putting their cards on the table (up front) so as to avoid be accused of hiding their true intentions.

[Super 80]

If Jazz was about to take delivery of some Avro RJ's or their own 146's were being re-engined at their next check - I might be able to give them the benefit of the doubt.

But this was a Miller spin-doctor calling in a favor with his old boss. Air Canada had no capability to opperate jets out of the island and they made the request at quite possibly the worst possible time.