Guest Six Sigma Posted January 9, 2012 Share Posted January 9, 2012 I thought they were much higher.http://boardingarea.com/blogs/thingsinthesky/2012/01/09/porter-plans-sixth-us-destination/?utm_source=twitterfeed&utm_medium=twitter&utm_campaign=Feed%3A+boardingarea%2Fthingsinthesky+%28Things+in+the+Sky%29 Link to comment Share on other sites More sharing options...
Thebean Posted January 9, 2012 Share Posted January 9, 2012 I thought they were much higher.http://boardingarea....s+in+the+Sky%29Those are accurate numbers. Link to comment Share on other sites More sharing options...
Guest Six Sigma Posted January 9, 2012 Share Posted January 9, 2012 Maybe the leap year will help the q1 for 2012...dismal Link to comment Share on other sites More sharing options...
Lakelad Posted January 11, 2012 Share Posted January 11, 2012 .and just in case the route can't cover its costs....Porter Airlines hikes rents at Billy Bishop Airport by up to 300%. Link to comment Share on other sites More sharing options...
Thebean Posted January 11, 2012 Share Posted January 11, 2012 A far more interesting headline would be:Porter Audited Statements Show First Profit In 5 Year History.WestJet and jetBlue would very likely not exist today if they'd had that sort of history of futility in their early history.Their respective shareholders, as deep pocketed as they were, simply would not have tolerated those sorts of losses of over a 6 year + window, (recognizing that the capital didn't come in when the wheels went up). I wouldn't even want to think of the opportunity cost lost after having that sort of money tied up not generating any sort of return over that length of time.Perhaps the best thing Porter could wish for is a complete moratorium on any additional slots coming available there. Porter has no choice but to expand into the slots allotted in order to ensure no one else gets any, even if it means perpetually losing money in doing so.It's a bit like feeding goldfish. As long as the food is in the water, they'll eat all of it to ensure none of it goes to another fish, even if it kills them.For the record, in 2010, the Baltimore/Washington DC - Toronto market was about 16.5% the size of the consolidated Toronto - New York market and Philadelphia-Toronto was about 13% of the Toronto-New York market. Atlanta is about 14% (741 miles), then comes MSP at 9% (691 miles). The rest of them, Cincinatti, Cleveland, Columbus, Kansas City, Charlotte, Indianapolis etc are individually barely 3% the size of the Toronto-New York market.Interestingly, WJ is only operating in 1 of the top 6 transborder markets on a permanent basis, (YVR-LAX). Link to comment Share on other sites More sharing options...
Guest Six Sigma Posted January 11, 2012 Share Posted January 11, 2012 US bound to keep EDC lending obligations in line. Do they not need pre screening ? Like a Rubiks' cube!! Link to comment Share on other sites More sharing options...
DEFCON Posted January 11, 2012 Share Posted January 11, 2012 The provided chart indicates Porter’s load factor on selected routes has moved ‘up’ into the 60% + range and yes, I know they’ve been running seat sales. In spite of ‘all’ predictions to the contrary, Porter has remained operational for 5 years and continues with its expansion plans. From what I’ve seen; once a passenger / guest is lured away from Pearson and exposed to the Island experience, it’s highly unlikely anyone will see him back at Pearson again? A good business model combined with ‘staying power’ may prove to be the ‘final’ determining factor with respect to an air carrier’s success, or failure? We’ll see? Link to comment Share on other sites More sharing options...
dagger Posted January 11, 2012 Share Posted January 11, 2012 The provided chart indicates Porter’s load factor on selected routes has moved ‘up’ into the 60% + range and yes, I know they’ve been running seat sales. In spite of ‘all’ predictions to the contrary, Porter has remained operational for 5 years and continues with its expansion plans. From what I’ve seen; once a passenger / guest is lured away from Pearson and exposed to the Island experience, it’s highly unlikely anyone will see him back at Pearson again? A good business model combined with ‘staying power’ may prove to be the ‘final’ determining factor with respect to an air carrier’s success, or failure? We’ll see?The charter shows the seasonality of routes - 60% LF in June may or may night be profitable, but 31% in January is not no matter what the fares are.Secondly, expansion doesn't mean profitability. You can fritter away a tonne of money expanding if you start with a tonne of money, either your own or from the aircraft manufacturers or their lenders.Thirdly, I suspect downtown works for some people and they will be likely to stay with YTZ, but there is more business transacted throughout the GTA that is close to YYZ than the downtown core. Where Porter clearly has a good thing going is on the YTZ real estate, where, as the article posted above suggests, they are milking tenants. So the holding company might be profitable but I'd like to see it break out the numbers on the airline and its operations. I'm intrigued by the huge rent increases they are giving YTZ tenants - chasing many of them out and getting some bad publicity as a result. Are those rent increases meant to generate profitability to cover up airline losses? Link to comment Share on other sites More sharing options...
DEFCON Posted January 11, 2012 Share Posted January 11, 2012 I doubt Porter is ‘milking’ tenants; everything in that God forsaken City is ridiculously expensive. The article claimed, there hadn’t been any adjustment in rents etc for five years and increasing rent by something between 30 & 300% depending, was overdue. Is that unreasonable? Link to comment Share on other sites More sharing options...
Thebean Posted January 11, 2012 Share Posted January 11, 2012 The rents collected at YTZ would be a pittance compared to the costs of operating an airline.The new terminal at YTZ is reportedly a $49m terminal development program. Forgetting about the operating costs and taxes on the facility, which would be at least $10psf on 150,000 sf, the entity owning the terminal would have debt service of at least $3.5m a year payable to whomever lent the money on the facility. It would be interesting to see the loan rate on such a facility.What sort of premium would you want on a $40m loan on a facility reliant on income from a business that has never historically been successful in that location, and, worse, should the business fail, there'd be no source of income to continue making the monthly debt service payment, leaving the lender with a $50m white elephant.I'd want at least 10% in this environment....Sky Regional will operate about 4,850 flights out of YTZ in 2012.Using YVR fees as indicative of market rents, they'd pay about $307 for general terminal fees per arrival, about $10 a day per aircraft for parking fees, maybe $2 a head per emplaned passenger, and about $40 psf for rental space.The total fee adds up to about $2m per year based on $412 per arrival.There might be some other bits and pieces, but it's not as if anyone is getting rich on collecting rents at the airport.That only works when you're the federal government and you're charging rent on assets that were paid off long ago. Link to comment Share on other sites More sharing options...
dagger Posted January 11, 2012 Share Posted January 11, 2012 I doubt Porter is ‘milking’ tenants; everything in that God forsaken City is ridiculously expensive. The article claimed, there hadn’t been any adjustment in rents etc for five years and increasing rent by something between 30 & 300% depending, was overdue. Is that unreasonable?300% is hardly reasonable even after five years. That's a tripling of rent, in case the math isn't obvious. Given the rates of inflation over the past five years, anything more than 20% would make up for the cost of living and reflect the claimed increased interest. We're not talking about bumping Joe's Snack Bar out of the main terminal to make room for Starbucks. We're talking about other properties that are only suitable for certain kinds of tenants. Link to comment Share on other sites More sharing options...
DEFCON Posted January 11, 2012 Share Posted January 11, 2012 If we had a tenant list complete with rental costs, we'd know better how those increases apply. Maybe there's only one tenant facing a 300% increase and the rest are closer to 30%? Link to comment Share on other sites More sharing options...
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