Support Grows For Porter

[Thebean]

Why not give Tim Hortons the exclusive right to sell donuts in downtown Toronto? You want cheaper donuts? Just take a $30 cab fare or waste time on public transportation to go outside the exclusion zone. What's the problem, right?

What do you think the public / political / media reaction would be in Washington DC if folks in their were told that 85% of slots and every non stop route bar one at DCA was now controlled by American Airlines and as a result, last minute trans-border fares were going to be 131% higher.

But not to worry!! There's lots of choice if want to take a $60 cab fare out to IAD.

It wouldn't even pass the giggle test.

As for higher fares to support higher wages, perhaps you should consider paying 131% more for your coffee, strawberries and bananas so the dirt poor pickers can be paid more. What's good for the goose is good for the gander, eh?

Sorry, buddy. The Pandora's Box of lower fares was opened up a long, long time ago and isn't going to be closed anytime soon.

If you think low fares aren't top of mind for Canadian travelers, go spend a day counting Canadian tagged cars at the parking lots at BLI, SEA, BUF, IAG, GTF or GFK.

[j.k.]

"support higher wages, perhaps you should consider paying 131% more for your coffee"

it's called Fair Trade and it is worldwide and growing multi-billion dollar movement with aims at sustainability enviromentally/socially. Even supported now by multi-nationals such as Nestle and Starbucks. Public doesn't seem to have a problem with the premium as products are often marked as fair trade.

http://en.wikipedia.org/wiki/Fair_tradehttp://en.wikipedia.org/wiki/Fair_trade

re:donut monopoly... if the market could bare the price monopoly or not I think TH would charge it. But very few people want a donut bad enough to pay $5 so the market sets the price range between suppliers in the city.

re:CDN tags across the border. What does that have to do with Porter walk up fares? Isn't that more a comment on the federal taxes imposed at our airports, on all our carriers? Do you think buddy who needs a last minutes Chicago trip drives from downtown TO for 2 hours, waits an hour in the border line just to save a couple hundred out of BUF on his airfare?

[MD2]

What bean is saying and expecting goes against any form of logic. For instance:

1. He says Porter charges too much, whereas in reality it does not and this can easily be seen on routes it competes with other airlines. A quick internet check reveals that on any city pairs Porter offers very competitive rates with other airlines that are present on those routes. Bean has searched for hours and days to come up with something that he perceives as an anomaly and then use it as a justification for opposition to Porter. Simply put, bean wants Porter to act like an LCC and lower walk-up fares to the dollar and cents per mile formula that bean himself advocates. Clearly this is a very unreasonable expectation as bean is NOT in charge of pricing at Porter or its business plan and corporate strategy. In fact, this issue applies to ANY airline that operates on same city pairs and competes with Porter. It could also be said that Air Canada, American, United, etc. do not slash the walk-up fares according to bean's imaginary formula!

2. Bean says that slot allocation at City airport is unfair, presumably because it does not include his favorite airline WestJet, while he has also stated many times that WestJet (and he himself) did not give Toronto City airport a moment's thought. One wonders why is it then that he expects now to have the slots that he wants all of a sudden that he claims WestJet is interested. I say claims because WestJet has not made official application to the actual operator of the airport, the TPA, but instead has made a PR stunt to detract and distract the attention from Porter's proposal. Furthermore, the City airport is slot controlled and at the moment there are no slots available and in fact there is great debate on whether or not they should be increased at all. If WestJet was truly interested in serving the people of Toronto from City airport it would have done so years ago when there was no one there, or at the very least would get behind the cause of expansion, so it too can benefit from it in due time. It is abundantly clear that WestJet has no intention of truly serving the consumers from Toronto City airport and it is only doing this to be an obstacle to Porter's growth. At any rate, Porter is not in charge of handing out slots, the TPA is. So why is it that bean constantly complains about the slots allocation against Porter. His complaints are clearly misdirected.

3. Bean constantly complains about slots allocation at City airport and compares it with Washington DC's Reagan airport and so on as if it too was always a bustling airport with multiple long runways and terminals and millions of travelers going through it. However in reality it has only become successful at the expense of Porter's large capital investment and as a result of its great work to grow that market. It was marginally successful once before in the 80s with City Express when Air Canada stepped in, saturated the market, bankrupted City Express, and then all but walked away. Bean envisions a similar scenario this time around when Porter can be bankrupted much to the delight of WestJet and Air Canada and their duopoly.

Additionally on the issue of the slots it's not as though tens of airlines have been denied access, far from it. To date only a few have applied AFTER Porter really put the airport on the map. It is public knowledge that US airways did not want it, Continental forfeited their 16 slots and Air Canada received 30. The slot distribution was done by a foreign third party that has been involved in similar urban airport slot distribution, not the TPA, Air Canada as usual complained and sued everyone involved, but lost all its multiple lawsuits and was even ordered to also pay legal fees.

In final analysis, the source of all contention with Porter, be it from the direction of bean and WestJet, or Air Canada and dagger and others, is because they are upset that another airline is thriving and offering more choices and frankly better service at a competitive price to consumers. They much rather it would disappear so they can go back to their nice little duopoly and control the market as they wish. This clearly is not to the benefit of the consumers.

[Thebean]

Porter is thriving?

Jetsgo was thriving too. Lots of passengers. No bottom line.

By most definitions, thriving infers net profitability. A nice story but the harsh reality is there is not a shred of evidence proving this is the case and more than enough to arrouse suspicion amongst those who know their way around airline economics that the opposite is true.

Furthermore, those of us with a memory recall those precise claims being repeatedly made leading up to Porter's failed IPO attempt in May 2010. The Preliminary Prospectus unabashedly proved the claims of profitability were unmitigated nonsense. The amended prospectus which brought the numbers further up to date further illustrated how poorly the company was doing from a financial perspective.

Since then, fuel is up, the labor force has matured, the C$ is back to 90 cents, the fleet is largely off the maintenance holiday that was driving that cost to a fraction of what Horizon Air's unit maintenance costs were who operated the identical fleet type with an average age then something close to Porter's fleet age in 2014.

It's also fairly safe to say Porter's most lucrative route, YTZ-EWR suffered a precipitous change as of June 2012 as both yields and passenger traffic tumbled, substantiated by both US DoT data and MIDT tapes. Then there's the touchy issue of Porter being shopped around at the behest of one of its main shareholders. It doesn't instill a great deal of confidence in the financial performance of the venture when shareholders retain a major international bank to shop the company around and worse, come up with nothing.

So forgive my skepticism on this matter. From a financial perspective, when it looks like a duck, walks like a duck and quacks like duck, it's usually a duck.

Let's be clear. I'm not commenting on Porter's product. I haven't flown Porter, but by all accounts, it is a solid product. I refer exclusively to fiscal performance.

Oh, and for the record, yesterday late evening's data showed that Porter's transborder fares today are 131.6% more expensive per mile than fares to the NYC area where LCC competition exists. Domestically, their fares today on routes not served by an LCC are 16% higher than a comparable basket of fares in Western Canada where normal competitive forces are at work.

Pick any airline you like and do the math on what happens to the bottom line when traffic drops 5% and yields drop 5%. You'd be hard pressed to find any airline on the planet that could withstand that sort of decline for any length of time.

Had that sort of scenario occurred to WJ in 4Q 2013, it would have turned a near industry leading 9.73% operating margin into break-even. If the same had occurred to AC in that quarter, their margin would have tumbled into -11.6% territory and a loss pushing $300m in the quarter.

Naturally, we are expected to believe Porter's endless qualitative arguments in the absence of any quantitive data, other than what is publicly available and what can be inferred by those of us who have been to this rodeo before and have a pretty good idea of how to piece together an assessment.

Prove me wrong.

[Guest longtimer]

The questions about and predictions that Porter would not make it started way back in 2006 so I guess if they can not be described as "thriving" then "persevering" would suit.

http://theairlinewebsite.com/topic/382411-ac-and-the-toronto-port-authority/?p=1484174

http://theairlinewebsite.com/topic/342850-something-else-doesnt-compute-about-regco/?hl=porter#entry1335614

[j.k.]

Fair trade. Market price of donuts. Transborder last minute. Any comment or did you ignore that because your ideas on that are flawed?

Again, I don't particularly like Porter, I don't think they're profitable, nor should they get a virtual monopoly. I have little doubt they would get their clocks cleaned with AC or WS or both in there with a share of slots, and I'm sure their time is limited. But I reject your general arguments as arrogant and self-serving... speaking of ducks.

[Thebean]

The questions about and predictions that Porter would not make it started way back in 2006 so I guess if they can not be described as "thriving" then "persevering" would suit.

http://theairlinewebsite.com/topic/382411-ac-and-the-toronto-port-authority/?p=1484174

http://theairlinewebsite.com/topic/342850-something-else-doesnt-compute-about-regco/?hl=porter#entry1335614

That is an appropriate term and a fair description.

There would be some that would question whether it is perseverance or just plain stubborn and perhaps futile obstinance.

I would acknowledge that it must be incredibly frustrating for Porters management to reconcile a strong product with an inability to generate any sort of meaningful profits or a return for shareholders since launch 7+ years ago. If patience is a virtue, I'll give them that.

It is probably no easy task to go back to the well to attract more capital / take on more dilutive debt with promises of, maybe, future riches down the road.

It'd be like bankrolling a gambler for that one last big roll of the dice.

[Thebean]

Fair trade. Market price of donuts. Transborder last minute. Any comment or did you ignore that because your ideas on that are flawed?

Again, I don't particularly like Porter, I don't think they're profitable, nor should they get a virtual monopoly. I have little doubt they would get their clocks cleaned with AC or WS or both in there with a share of slots, and I'm sure their time is limited. But I reject your general arguments as arrogant and self-serving... speaking of ducks.

The % of products sold in the western world under so called " fair trade" rules is miniscule. It is as much a marketing scheme as anything else.

The discrepancy in last minute trans-border fares between markets with LCC competition and those that don't have it is an easy analysis to under take and data is regularly being captured by various interested parties. Do it yourself one day. Compare Porter's last minute pricing from Toronto to NYC airports and Toronto to Washington, Chicago and Boston.

If you want to take a look at slightly longer haul legs, have a look at tomorrow's pricing from Toronto to Atlanta, (739 miles, $682 + taxes), Toronto to Minneapolis, (678 miles, $662) or Toronto - Houston (1,280 miles, $1,600) and pricing where there is an LCC in the market, such as Toronto-Myrtle Beach (691 miles, $186 + taxes), Toronto-Miami, (1,233 miles, $238) or Toronto-Orlando, (1,055 miles, $290). One has to be pretty obtuse to not see the correlation.

Interestingly, WestJet's fares tomorrow from Kitchener / Waterloo to Calgary and Hamilton to Calgary, both monopoly routes, are priced slightly below the lowest fare from Toronto to Calgary tomorrow, currently, $488.30, only $100 more than Porter's rather pretentious $374 fare for a 45 minute hop down to Windsor.

Gosh, if only Porter charged less on its monopoly routes than it did on routes with competition tomorrow. Newsflash: Pigs reported flying over Brandon earlier today......

If you believe the price of a commodity drops when supply is regulated and accessed through a sole supplier, I guess that's your call. It's never been the case elsewhere, whether we're talking about bananas, donuts, gasoline or an airline seat.

I probably wouldn't be able to convince you the world is round either.

[j.k.]

I didn't say I believed prices drop when supply was regulated. I said there is a maximum price that the market will bear and that determines the price. If TH was the only donut shop in town and wanted $5 for a maple dip, I guess I'd stop eating donuts. So in the case of Porter if they are charging it and the market is buying it instead of going to Pearson what's your problem?

Kitchener/Hamilton a few bucks cheaper to YYC and I bet WS makes out better on a cost perspective with lower landing and gate fees than Pearson... they prefer people there over yyz so I think I'd expect that. If price was higher than Pearson they'd lose people to Pearson - it is what that market will pay.

Re: Fair trade- it is a small movement and there are detractors but it puts ownership and profits into communities, most recognized in coffee production - over 1 billion lbs. of coffee produced last year was certified, but year over year growth continues and it will represent close to 10% of worldwide production this year. McDonalds, Starbucks, Second Cup, Nestle are in so it's not insignificant and consumers obviously don't reject the idea of a few coins more for a social improvement rather they appreciate it.

I won't be checking prices because I could care less, I guess I'm obtuse like that. (Why exactly do you care again?) Besides, I'm sure there will be more rivetting reports from Mr. Dufresne - Wrongly Convicted Consumer Crusader to look forward to.

[MD2]

Bean, whether Porter is thriving or not is not your concern, and your definition of "thriving" is not my concern, period.

The question was that you misleadingly accused Porter of having high walk-up fares, which I demonstrated that it was not. Porter's prices are very competitive and in fact mostly lower than its existing competition on its routes, in spite of offering better service. If you're not complaining about other airlines having "high" walk-up fares (by your definition), why is it that you go to such an extent to do it for Porter, especially when one of the culprits is your favorite airline's partner. You should complain to your partners since you are much more likely to persuade them than another airline that respectfully does not care about your opinion.

Then was the question of slots, which again was explained to you that it is the TPA that distributes them, and if you have an issue with the way in which they were distributed you should take it up with them. Air Canada as you know did just that multiple times and lost every one of its lawsuits.

If consumers find Porter's product worthy of its price, they'll buy it, if not they won't. So what is your problem? You have been prophesying Porter's doom and gloom for eight years, you can do it eight more years if you wish, but your saying so isn't going to make it happen!

[j.k.]

Okay... so I looked up flights... Random sampling from PD/WS/AC for tomorrow...

City / PD / WS / AC

Chicago /1223 / 1187 / 966

Boston / 831 / NA / 837

ewr/lga / 411 / 359 / 386

DC / 630 / 1225 / 637

Montreal / 253 / 258 /259

Ottawa / 339 / 301 /301

Halifax / 292 / 331 / 331

What's the problem here... Looks like they are all in the mix there... buck here, 40 bucks there, all in the range though. I never have looked for myself but I don't see where your claims are supported by this data.

[Thebean]

Okay... so I looked up flights... Random sampling from PD/WS/AC

City / PD / WS / AC

Chicago /1223 / 1187 / 966

Boston / 831 / NA / 837

ewr/lga / 411 / 359 / 386

DC / 630 / 1225 / 637

Montreal / 253 / 258 /259

Ottawa / 339 / 301 /301

Halifax / 292 / 331 / 331

What's the problem here... Looks like they are all in the mix there... buck here, 40 bucks there, all in the range though. I never have looked for myself but I don't see where your claims are supported by this data.

Last time I checked, WJ does not fly it's own iron to DC, Boston or Chicago. Those are American fares, set in Dallas, funneled through the magic and mystery that is Sabre onto WJ's site. We've been thru that before.

You are dreaming if you think WJ actually sells any of those fares. If you want AA selling onto your Cdn network, you have to accept this sort of stuff and recognize the fares will precipitously drop when WJ tackles the route with its own iron and sets it's own fares.

Note that Delta prices it's base fare on YYZ-LGA flights tomorrow on WJA iron at US$272.50 and WJ's flights are priced at C$265. Hmm. No $1.50 a mile yields on routes flown with WestJet iron. I wonder why....?

I wouldn't include Porter one stops to any n/s flying on these routes, ie YHZ. The QSI falls off the table in that scenario and I'll be the first one to admitted that comp isn't fair to Porter.

Let's focus on walk up pricing on n/s routes operated on iron controlled and flown by any of the three airlines domiciled in Canada, booking today for lowest fare flights tomorrow between 6am and 9am, with all data captured between 20:30 and 21:00 EDT.

The data shows that Porter's transborder fares tomorrow to BOS, IAD and MDW are 131.6% more expensive per mile than fares to the NYC area where LCC competition exists, ($1.867 vs 80.6 cents for flights to NYC). Porter's transborder fares to these 3 markets are 7.4% higher per mile than Air Canada's average fare per mile, even when including BWI which is a viable alternative for travel to areas north east of DC. How do you like them apples? Porter is even more pricey than Air Canada!

Domestically, Porter's fares tomorrow on 4 intra-Ontario routes not yet served by an LCC with an ASL of 274 miles are 51.5% higher per mile than a comparable basket of 12 routes in Western Canada operated by WJA with an ASL of 289 miles where normal competitive forces are at work.

Interestingly, Air Canada's average fare per mile on the 9 common routes in Western Canada tomorrow with an ASL of 281 miles are 1.8% lower per mile than WestJet's. I would hope their operating costs have a similar advantageous percentage over WJ in order to compensate, but that is an entirely different story.

[MD2]

Bean,

Why is it that everyone has to focus on what you like and supports your narrow view on pricing?

Why is it that you don't include AA in the mix, or WestJet's certain flights, but only the ones that support your argument?

Why is it that you expect only Porter to slash the walk-up fares according to your imaginary formula and not other airlines?

This narrow view on pricing to arrive at a desired conclusion, especially after eight years of incessant prediction of doom and gloom is very biased.

[boestar]

Bean is offering LIKE to LIKE comparisons. This is a standard practice. Not apples to oranges comparisons that have no bearing. Can we please stop this pointless bickering. Porter flies planes. I don't give a rats pituti if they are full or not. Eventually the chickens come home to roost.

[MD2]

boestar, I appreciate the effort, but I'm afraid your analogy is incorrect. If many airlines on certain routes sell tickets for comparable prices, one cannot choose one airline out of the mix to focus all his complaints and write essays upon essays of misinformation. This is personal vendetta rooted in prejudice; and where there is prejudice there is no reason or credibility. Does this explanation not make sense?

[Thebean]

Bean,

Why is it that everyone has to focus on what you like and supports your narrow view on pricing?

Why is it that you don't include AA in the mix, or WestJet's certain flights, but only the ones that support your argument?

Why is it that you expect only Porter to slash the walk-up fares according to your imaginary formula and not other airlines?

This narrow view on pricing to arrive at a desired conclusion, especially after eight years of incessant prediction of doom and gloom is very biased.

All US domiciled airlines flying the four noted trans-border routes on a n/s basis are included in the survey.

As discussed, even a rudimentary understanding of QSI methodology makes including one stop alternatives where n/s service exists, especially in short haul markets, superfluous.

This is borne out by WJ's experience in 1995 when QSI / stimulation analysis of all proposed markets disregarded the impact of one stop flying. When the analysis was reviewed three years later, there was very little discrepancy in what was predicted and what actually occurred in the marketplace. One stop alternatives were largely irrelevant.

For example, although competition flew YEG-YYC-YLW, the predicted stimulative effect of WJ's n/s YEG-YLW flights, estimated at at a -1.3 CoE with highly reduced fares was virtually identical in real life to what was predicted three years earlier.

In a real world example, I doubt there are very many folks who would consider flying Toronto to New York (LGA) tomorrow, (Friday) on US Airways that included a stop, a minimum 60 minute connection and change of planes in Washington or Philadelphia when four other convenient and similarly priced non-stop options exist.

Porter is keenly interested in ensuring that the greater consumer community is blissfully unaware of the gouging going on at YTZ. And why wouldn't they? Taxpayers and voters have no tolerance for price gouging monopolies.

If you are going to survey any subject matter, you better define the survey parameters and consistently stick with them day after day. The only variables that changes in the survey are

1. The precise time of day of data collection. It occurs between 8pm and 2am EDT.

2. The precise time of the flight. The lowest base fare available in that time window is taken, but it must depart between 6am and 9am. I could have moved the time back to 5:45am to favorably bias WJ's often cheaper YYC-YEG headstart every morning to make Porter's comps look even worse, but chose not to.

Trans-border routes are compared to trans-border routes, domestic routes are compared to domestic routes.

I'm focusing on fare levels on non stop routes without low cost competition, so, guess what? The survey compares non stop routes WITH low cost competition to non stop routes WITHOUT low cost competition.

Last time I checked, AA, DAL and United were not LCC's, and judging by recent decisions by the US Department of Justice, they seem to share my opinion. It is pointless to include their code share offerings operated exclusively on their iron unless there was some sort of evidence the LCC actually controlled the pricing, which is obviously not the case.

Transborder routes without low cost competition are Toronto to BOS, MDW/ORD and IAD/DCA/BWI

Domestic routes without low cost competition are Toronto to YQG, YSB, YAM and YTS. The average flight distance on these four routes is 273.5 miles.

As much as I could conjure up a list of four much longer domestic routings that would obviously have much lower fares per mile flown to compare to the 4 routes in question, that would be an utterly useless exercise.

Who cares if Porter's domestic fare per mile charged on a 273 mile average sector is 10x higher than what WJ charges on a basket of fares including YYC-YHZ, YVR-YYZ, YYZ-YHZ with a couple of ultra shorthaul flights brought in to skew the number down to something in the 900 mile range. It's a completely irrelevant comparison.

A relevant comparison has to be at least four, and preferably far more than four routes in order to smooth out if not eliminate any anomalies. In this case, it is an identical basket of 12 n/s WJ routes in western Canada, from YWG to YYJ, randomly selected, all between 153 miles (YYC-YEG) and 398 miles (YYC-YXX), including 3 exclusive n/s routings, that average out to 289 miles, compared to Porter's 273.5 mile average.

After about 10 days data selected over a 20 day period, the numbers are going to be pretty obvious, as they already are.

I'm open to anyone suggesting any non-stop routing in this geographic region, provided the cumulative average sector length remains as close as possible to Porter's 273 mile average and no route exceeds 400 miles or is less than 150 miles. If you think I'm cherry picking routes, YOU pick 'em. I doubt it'll meaningfully change the outcome.

Folks who can't fathom the difference between Porter, the sole airline in North America, if not the world, who have virtually exclusive access to a downtown airport in a nation's largest city with all the other airlines who compete openly at every other airport, with virtually no restrictions are, at best, obtuse or at worst, self serving.

I don't focus on Air Canada or other legacy carriers because they compete openly at YYZ and elsewhere. Every route noted above is available for any airline to commence operations within 120 days provided the airline has the aircraft to operate the flight.

Sure, some are slot controlled, (LGA and DCA in particular), but if slots are desired badly enough, there are mechanisms to acquire them, starting with large sums of cash. That is not the case at YTZ where normal competitive forces in play at every other airport, including every other airport Porter operates into, are stifled.

Anyone who believes the codswallop that YTZ and YYZ are common markets in the real world is deluded.

If multiple airports within large urban areas were common markets, then presumably it would make no difference to a traveler whether they flew from Calgary to Abbotsford or Vancouver. They are equal markets, right?

Same with flying from Calgary to the GTA. YKF is considered a common market so fly there instead of YYZ. According to Porter logic, there is no difference between the two. They are common markets and both equally convenient in every respect to everything.

Going to NYC from YYZ? Toss a coin. There's no difference in any respect whether you fly to JFK, LGA or EWR, right?

Flying from Phoenix to the Los Angeles area? Fly to anyone of SNA, LAX, BUR or ONT. Take your pick. They are identical markets and no matter where you go, it'll make no difference to what ever the purpose of your trip is.

I mean, seriously? Give your head a shake......

Porter wants to play in everyone else's sandbox, but acts like a spoiled 6 year old when it comes to anyone wanting to play in their's.

Porter hides behind the slot issue and claim it's all the TPA's fault. If they were truly interested in the free market and ensuring consumers had choice, they would make a public statement to the effect that YTZ is a publicly owned, taxpayer supported airport and as such, it should be opened up for all, especially if more tax dollars are to be poured into it to expand the infrastructure.

You've never seen WJ or AC make public statements to the effect that Hamilton, Abbotsford, Brandon, Red Deer or Val d'Or airports should be restricted, in anyway shape or form, from competition. Just Porter.

And frankly, that rubs me the wrong way.

If Porter is going to continuously pump out propaganda in favor of their continued monopoly at YTZ, I see no reason why others shouldn't be allowed to refute the points one by one if they so choose.

What irks Porterites is the thought that this particular debate is in public and accessible to anyone with a horse in the race, including various governmental policy analysts and media types. It exposes a number of inconvenient truths,

Porter wants this debate to remain in the shadows.

I hate shadows.

[Lakelad]

.

City calls for caps on number of passengers at Toronto Island airport

Without a commitment to cap flights and passengers, there is little point in considering any airport expansion, city officials say.


Thu Mar 20, 2014. - Toronto Star
Vanessa Lu - Business Reporter

Toronto city officials are urging politicians to restrict the annual number of passengers at Toronto’s island airport to 2.4 million initially, along with hourly caps of 884 passengers during peak times.

“The caps are designed to link the airport’s growth and passenger volumes to the capacity of groundside transportation and community infrastructure,” according to a supplementary report by deputy city manager John Livey, released Thursday.

City staff say without a commitment on flight and passenger caps, there is little point in considering any airport expansion.

As well, the caps ensure that the airport’s operations are conducted in a way that best recognizes and respects its location in the central waterfront, the report added.

The proposal calls for the city to negotiate a three-phase framework for managing growth at Billy Bishop Toronto City Airport, growing possibly to 2.7 million annual passengers with up to 1,178 passengers during peak flight hours.

It comes as the city’s executive committee is set to consider next week whether city council should endorse Porter’s proposal to fly Bombardier’s CSeries jets from the airport.

“It’s clear that after months of pressure by Porter and Norm Kelly, city staff caved in.”- NoJetsTO

.

[aileron]

From Toronto.ca (committees/executive) City Staff Report EX40.1

1b Request to Amend the Tripartite Agreement for Billy Bishop Toronto City Airport - Supplementary Report Origin (March 19, 2014) Report from the Deputy City Manager, Cluster B Recommendations

The Deputy City Manager, Cluster B recommends that:

1. City Council authorize the Deputy City Manager, Cluster B to negotiate with the Toronto Port Authority and Transport Canada the following phased framework for managing growth at Billy Bishop Toronto City Airport:

a. Phase One:

i. annual origin/destination passenger cap of 2.4 million;

ii. peak hour flight (slot) cap of 16;

iii. peak hour origin/destination passenger cap of 884; and

iv. daily flight (slot) cap of 202.

b. Phase Two:

i. annual origin/destination passenger cap of 2.7 million;

ii. peak hour flight (slot) cap of 20;

iii. peak hour origin/destination passenger cap of 1,178; and

iv. daily flight (slot) cap of 202.

c. Phase Three: passenger and flight (slot) caps, based on transportation capacity, community impacts and experience with the Phases One and Two.

2. City Council authorize the Deputy City Manager, Cluster B, to negotiate with the Toronto Port Authority and Transport Canada the conditions precedent of the phased framework for managing growth at Billy Bishop Toronto City Airport, that include but are not limited to:

a. Phase One:

i. commencement of an Airport Master Plan, runway extensions environmental assessment and runway extensions detailed design;

ii. implementation of the following measures:

1. implementation of passenger wayfinding and route planning tools for users of the airport;

2. taxi operational adjustments to achieve increased passenger efficiency;

3. enhancement of shuttle service to achieve an increased modal split and regular monitoring and reporting of shuttle usage to the City;

4. implementation of traffic monitoring for Eireann Quay and reporting to the City;

5. implementation of an airport noise monitoring system and reporting protocol;

6. implementation of restrictions on ground-based airport noise;

7. review of deicing and chemical management programs;

8. implementation of air quality monitoring and reporting to the City;

9. construction of aircraft run-up barrier or enclosure and alternate procedures for mitigating run-up noise in the interim;

iii. a robust plan for public and stakeholder input into all planning exercises, including the Airport Master Plan and runway extensions environmental assessment;

iv. participation in the Official Plan review and Bathurst Quay Precinct Plan study process (to be led by the City); and

v. Toronto Port Authority and Transport Canada letters to confirm full participation in the above.

b. Phase Two:

i. amendments to the Tripartite Agreement to require annual Noise Exposure Forecast monitoring and reporting by Transport Canada to the City;

ii. completion of a new Airport Master Plan by the Toronto Port Authority, aligned with the City's new Bathurst Quay Precinct Plan and Official Plan;

iii. a revised set of Official Plan policies for the airport;

iv. completion of an environmental assessment for the proposed runway extensions consistent with the letter dated February 27, 2014 from the Toronto Port Authority, with scope and components to be finalized to the City's satisfaction;

v. a final Code 3 airport runway design, including all modifications to airside facilities, acceptable to Transport Canada, with no changes to the airport's Marine Exclusion Zones as currently configured, that would materially encroach on the Western Shipping Channel;

vi. certification of the Bombardier CS-100 or similar aircraft for operation at Billy Bishop Toronto City Airport, and confirmation that such aircraft would meet the noise restrictions contained in the Tripartite Agreement, secured through provision of a remodelled Noise Exposure Forecast 25 Contour;

vii. funding for groundside traffic and community infrastructure improvements, to the agreement of all parties and in keeping with the findings of the Billy Bishop Toronto City Airport review, Eireann Quay Strategic Transportation Study and Bathurst Quay Precinct Plan;

viii. endowment of a community benefit fund for public realm improvements, housing noise reduction retrofits, and any other noise reduction opportunities;

ix. construction management plans for the proposed runway extensions and related work, designed to mitigate community impact (especially overnight);

x. mechanisms for airport operations monitoring and dispute resolution;

xi. enhanced remedies for non-compliance; and

xii. such other terms and conditions as deemed necessary by the Deputy City Manager, Cluster B, in consultation with the City Solicitor.

c. Phase Three:

i. funding for additional groundside traffic and community infrastructure improvements, to the agreement of all parties;

ii. advancement of, and coordination with, appropriate public transit improvements, including the Western Waterfront Light Rail Transit;

iii. coordination of transportation infrastructure to improve access and egress of airport passengers with plans for the Canada Malting site redevelopment; and

iv. such other terms and conditions as deemed necessary by the Deputy City Manager, Cluster B, in consultation with the City Solicitor.

3. City Council request the Toronto Port Authority to submit a letter confirming the agency's commitment to managing growth at Billy Bishop Toronto City Airport through caps and phasing. The Toronto Port Authority should confirm:

a. its commitment to satisfy the conditions precedent for Phase One; and

b. its willingness to negotiate required Tripartite Agreement amendments and any other agreements for Phase Two and Phase Three approvals.

4. City Council request the Government of Canada (represented by the Minister of Transport) to submit a letter confirming the government's commitment to managing growth at Billy Bishop Toronto City Airport through caps and phasing, and their engagement in negotiating required Tripartite Agreement amendments for Phase Two and Phase Three approvals.

5. City Council request the Deputy City Manager, Cluster B, to report back to the Executive Committee with the outcome of the negotiations including all recommended Tripartite Agreement amendments.

6. City Council request the Deputy City Manager, Cluster B, to undertake further studies and consultations that may be necessary arising from this review.

7. City Council request the Chief Planner to report back to Planning and Growth Management Committee and Council on alignment of the Airport Master Plan with the City's policies and objectives, the Official Plan and the Bathurst Quay Precinct Plan.

8. That the Executive Committee receive for information all recommendations from the November 21, 2013 staff report on Billy Bishop Toronto City Airport.

Summary

This report provides a further update on the review of Porter Airlines' request for an exemption to the commercial jet-powered aircraft ban at Billy Bishop Toronto City Airport (BBTCA) and two 200 metre extensions to the main east/west Runway 08/26. The request would require amending the 1983 Tripartite Agreement between the City of Toronto, Toronto Port Authority (TPA) and Government of Canada (represented by Transport Canada) that governs the operation of the airport.

Considerable effort has been made by staff and stakeholders to evaluate this proposal (studies, meetings, etc.). Several key requirements are necessary to permit consideration of amendments to the Tripartite Agreement. They include, but are not limited to, the following: an environmental assessment of the runway extensions; a detailed design for the runway with taxiway configurations; a method of construction for these facilities; and Transport Canada confirmation that the design and operating procedures of the airport will not materially alter the Marine Exclusion Zone (MEZ) and will fall within the Noise Exposure Forecast (NEF) 25 Contour. In addition, the City must update and re-frame its Official Plan policies to guide the future form, scale and scope of the airport, as well as its relationship to other uses in the Central Waterfront.

In order to frame negotiations with the TPA and Transport Canada going forward, staff are recommending a specific list of requirements tied to a phasing framework with airport passenger volume and flight slot caps, that will be necessary for consideration of any amendments to the Tripartite Agreement. The contents of this report are meant to frame the discussion for Council to give clear direction in bringing this matter to a conclusion. Accordingly, staff are seeking a mandate from Council on these specific requirements to avoid any ambiguity on what will be required in order to have Council decide on amendments to the Tripartite Agreement.

Staff are proposing a framework that will place limits (caps) on airport passenger volumes and the number of daily and hourly flight slots in order to address issues raised in the November 21, 2013 staff report. The caps are designed to link the airport's growth and passenger volumes to the capacity of groundside transportation and community infrastructure, and to ensure that the airport's operations are conducted in a way that best recognizes and respects its location in the Central Waterfront.

If passenger and flight caps are not implemented at BBTCA, under current restrictions and without the introduction of jets, passenger volumes could continue to increase from the current 2.3 million passengers per year (2 million local, referred to as origin/destination or "O/D", and 300,000 transfer) to approximately 3.8 million, without adequate measures to mitigate effects. Slots could also be increased from the current voluntary cap of 202 per day to an unknown number, provided the increase complies with the NEF 25 Contour as required by the Tripartite Agreement.

If there is no commitment between the Tripartite Agreement signatories to pursue caps at the airport, there will be little sense in further consideration of airport expansion beyond the current terms of the Tripartite Agreement.

Staff have undertaken this review without regard for which airline(s) operate(s) at BBTCA. The decision on the future of the airport must be airline agnostic and should be based on the best interests of the airport and the City over the long term.

The proposed caps are based on forecasted passenger volumes and local road capacity. Increases to the cap levels are tied to improvements and investments in groundside infrastructure, and improved performance of other modes of transportation to BBTCA such as transit and shuttle bus.

The City requires confidence that the other signatories to the Tripartite Agreement will deliver on a commitment to co-develop a growth management framework for BBTCA with the City. In addition to caps at the airport, the City will require commitments from the TPA and Transport Canada to address issues such as noise management, traffic, flight paths, chemical/fuel management, community improvements, ongoing consultation, curfew hours, and other matters that have been identified as measures to improve conditions for the adjacent neighbourhood and waterfront community. These issues must be addressed prior to Council's consideration of any amendments to permit jet-powered aircraft and runway extensions at the airport.

The recommendations contained within this report outline a stepped process for entering into negotiations with the signatories to amend the Tripartite Agreement. The first step would be for Council to authorize staff to enter into negotiations. Once this is complete, the City would secure letters from the TPA and Transport Canada that confirm their willingness to negotiate the required Tripartite Agreement amendments. In the case of the TPA, the agency would also commit to satisfy the conditions precedent associated with Phase One of the framework.

The TPA, working collaboratively with the City and Transport Canada, would then deliver on the conditions precedent associated with Phase Two of the framework. This Phase includes a significant amount of work to be undertaken by the TPA in conjunction with Transport Canada. The TPA would complete a new Airport Master Plan, undertake an environmental assessment,prepare a detailed runway design that confirms the position of the MEZ and continued compliance with the NEF 25 Contour.

Together then, the City, TPA and Transport Canada would negotiate proposed changes to the Tripartite Agreement. Staff would report back to Council on the results of the negotiations in a comprehensive report on the final framework for phasing with caps (and conditions precedent). This framework would replace the current jet and runway extension bans.

Phase Three negotiations would be more complex and, consequently, would take some time to resolve. The parties would have to integrate future plans for BBTCA with those for the Canada Malting site and Western Waterfront LRT. Phase Three negotiations would benefit from the monitoring of Phase Two operations and will be informed by the experience of the jets in practice. The City would be looking to see demonstrated improvement to airport operations as it affects the community and the traffic and pedestrian circulation in the area. Phase Three would involve a further staff report to Council on proposed amendments to the Tripartite Agreement, including securing the necessary funding for groundside transportation and community infrastructure, and consideration of revising the 2033 timeframe to a date necessary to recover such costs.

There are significant studies that the TPA must complete such as the environmental assessment, detailed runway design and updated airport master plan before staff could recommend any amendments to the Tripartite Agreement. This work will take the rest of 2014 to complete. A report to Council would target 2015. Further, certification of the Bombardier CS-100 aircraft is not expected until 2015.

Table 1: Summary of Proposed Phased Framework for Managing Growth

April 2014 Council Authorization to Negotiate

Upon Receipt of Letters from TPA and Transport Canada Confirming Engagement

• caps BBTCA to 2.4 million O/D passengers and 202 daily flight slots under existing runway and aircraft permissions, with hourly flight and slot caps;

Phase One

Address Current Operational Impacts

• commencement of an updated Airport Master Plan, environmental assessment for runway extensions, area planning study and detailed runway design;
• requirement for a series of immediate operational impact mitigation strategies to improve traffic, environmental impacts and noise management; and
• requirement for an improved community engagement and accountability strategy for the airport.

Phase Two

Provide Details of Runway Extension and Jet Proposal

Negotiate Tripartite Agreement Amendments

• complete an updated Airport Master Plan, area planning study and any required Official Plan Amendments;
• complete environmental assessment of runway extensions, runway design accepted by Transport Canada;
• confirmation of no material impact to Marine Exclusion Zones;
• confirmation of groundside infrastructure and community benefit funding; and
• certification of CS-100 aircraft for use at BBTCA.

Staff Report Back to Council to Authorize Tripartite Agreement Amendments to Permit Jets and Runway Extensions, with Conditions

If approved by Council, satisfaction of all Phase 2 conditions would result in permissions for runway extensions and jet aircraft operation at BBTCA provided:

• annual passengers are capped at 2.7 million O/D passengers and daily flight slots to 202, with hourly passenger and slot caps; and
• Council approves the implementing Tripartite Agreement amendments.

Phase Three

Long-term Growth Management

• advancement of long-term transit improvements, including Western Waterfront LRT plans;
• confirmation of Canada Malting Site plans;
• funding for additional groundside traffic and community improvements; and
• review of Tripartite Agreement extension beyond 2033.

Staff Report Back to Council to Authorize Tripartite Agreement Amendments to Permit Increases to Caps

• new caps: annual and peak hour passenger, and daily and peak hour slot (to be determined through Airport Master Planning process); and
• Tripartite Agreement amendments would require Council approval.

Staff have discussed the phasing framework with the TPA and Porter Airlines but there is no agreement yet on the terms and conditions. As well, Transport Canada, the public and airport stakeholders have not had the opportunity to review the proposed phasing framework and conditions. Any advancement of this framework would require not only the agreement of the Tripartite Agreement signatories but also comprehensive public and stakeholder input. Robust public and stakeholder consultation consistent with the standard in the waterfront is essential.

In response to the November 2013 staff report, the TPA and Porter Airlines have, since December, engaged staff in a series of positive discussions related to transportation issues, operations and passenger volumes caps. These discussions resulted in the TPA's submissions to the City on January 24, 2014 (attached to the January 30, 2014 staff report) and February 27, 2014 (attached at Appendix 1). The TPA's investment into the temporary taxi staging facility on the Canada Malting site has resulted in improved traffic conditions on Eireann Quay. In addition, the TPA has directly engaged with the Toronto District School Board to address traffic and safety concerns, and has resolved the Payment in Lieu of Taxes (PILTs) issue for the BBTCA with the City.

Financial Impact

The recommendations contained in this report have no financial impact.

Background Information (March 19, 2014) Report from the Deputy City Manager, Cluster B on Request to Amend the Tripartite Agreement for Billy Bishop Toronto City Airport - Supplementary Report
(http://www.toronto.ca/legdocs/mmis/2014/ex/bgrd/backgroundfile-67608.pdf)
(February 27, 2014) Appendix 1 - Toronto Port Authority Operational Commitments Memorandum
(http://www.toronto.ca/legdocs/mmis/2014/ex/bgrd/backgroundfile-67609.pdf)
(November 8, 2013) Appendix 2A - Transport Canada Correspondence, November 8, 2013
(http://www.toronto.ca/legdocs/mmis/2014/ex/bgrd/backgroundfile-67610.pdf)
(March 7, 2014) Appendix 2B - Transport Canada Correspondence, March 7, 2014
(http://www.toronto.ca/legdocs/mmis/2014/ex/bgrd/backgroundfile-67611.pdf)
(February 27, 2014) Appendix 3 - Toronto Port Authority Environmental Assessment Memorandum
(http://www.toronto.ca/legdocs/mmis/2014/ex/bgrd/backgroundfile-67612.pdf)
(March 19, 2014) Appendix 4 - Airbiz Aviation Summary of Comparable Airports
(http://www.toronto.ca/legdocs/mmis/2014/ex/bgrd/backgroundfile-67613.pdf)

[cata]

I don't think the reason for the expansion/jet proposal is what Porter say it is, the real reason in my opinion is that Porter wants a takeover by WestJet and will take a look only after Porter gets the approval. In a recent interview on BNN Gregg was asked about Porter, he didn't completely rule out the possibility of a takeover but said WestJet has chosen a go it alone route, Gregg knows very well how the game is played, he knows Porter is on the ropes and wants to get the best deal for WestJet's investors. Investment bankers pitching for Porter know that the price WestJet is willing to pay is much lower than they hoped for and only if the whole expansion/jet proposal goes through. That's why you see Porter working so hard on this, it's Porter investor's last chance to cash out.

[MD2]

Bean,

Enough has been said on the issue of pricing that you raised, so I make this my final question or remark on the subject depending on whether or not you choose to answer it directly.

What can be gleaned from your elaborate and comprehensive submissions, is that on routes (city pairs) where there is no LCC presence, walk-up fares (your favorite subject which relates to usually business people buying last minute tickets) are higher and according to you are unreasonable. Some, including myself and many others, have provided examples to the contrary which you rejected because even though the tickets were sold on WestJet's website, they were operated by American Airlines. My question is even if what you say is correct about the above, why is it that you are making this to be Porter Airline's fault? After all, there are many other airlines, including American Airlines which is WestJet's partner, that offer comparable prices. And why are you making this to be Toronto City airport's fault? After all there are multiple other airlines that fly from Pearson airport. Why are you conveniently focusing on Porter Airlines and connecting this to Porter's slots?

What can also be gleaned from your lengthy submissions is that when WestJet entered the Toronto-New York market (Pearson-La Guardia), the walk-up fares were substantially reduced on that city pair. If what you say is true, doesn't that also show that the same effect can be achieved from Pearson to other cities and more importantly does it also not demonstrate beyond any reasonable doubt that the determination of Competition Bureau (which you have been discounting and dismissing) was right on and Toronto Pearson and Toronto City airports are undoubtedly a common market?

In summary, by your own arguments,you have unintentionally demonstrated and proven that Toronto Pearson and City airports are a common market and as always, Porter Airlines will compete with the existing airlines on any routes that it operates, LCC or not.

[Zan Vetter]

This is precisely the point I'm making, MD2. If competition already exists in Toronto, as you state above, then why should the city embark on an airport expansion plan? Particularly one that only benefits one company?

-no new city pairs, therefore

-no incremental economic benefit to Toronto, only a redistribution of passengers

FWIW I think the WestJet buyout scenario is a pipe dream. But imagine for a moment it did happen. Now WestJet owns 95% of the slots at YTZ. Does the competition bureau accept this? What about if it was Air Canada? Ha ha, don't answer that. Fact is, porter occupies a very nice niche right now, but this plan that requires hundreds of millions of investment is pretty hard to justify on an economic benefit to the city basis. I benefits two corporations (porter, Bombardier), which has spinoff effects to be sure, but it doesn't benefit "Toronto" in the broad sense.

As has already been ruled by the competition bureau, and argued by the likes of MD2, competition already exists on every single city pair operated and proposed by porter. So what's the point of all this? The risk/reward from the City perspective just isn't there, in my view.

[Thebean]

The value of YTZ is only unlocked to the community if it is opened up to LCC competition.

There isn't a city in the US the size of Toronto that wouldn't give it's left nut to have a secondary airport downtown like YTZ to attract tourism / economic development.

Toronto has a downtown airport, yet is frittering away the keys to the kingdom by allowing the resource to be dominated by a high cost carrier that, when push comes to shove, takes the low road every time there's a choice of whether or not to offer low fares.

Porter's fare per mile to US markets in the north east not served by an LCC tomorrow is $1.87. If there is competition,(ie NYC), its about 77 cents a mile.

It's a shameful waste of a generator of economic activity that would benefit the entire GTA, not just Porter shareholders.

[MD2]

The economic benefits are included in the proposal and many other submissions that have been made in its support by trade unions and business bureaus and the likes. This will also improve and increase Toronto's airport assets. My point was that Pearson and City airports serve a common market and airlines can compete from either airports on any city pairs, as they do now. Also, if one complains that walk-up fairs are high on certain routes based on lack of LCC presence, in fairness one has to direct that comment towards ALL airlines that operate that route and offer comparable pricing, not just one airline because it suits his arguments. In spite of what Bean would have us believe, prices have substantially decreased where Porter has entered a market. Ask people of Northern Ontario where there is no LCC, they'll tell you.

[MD2]

Bean, you say Porter's fare per mile to NYC area is lower due to presence of LCC (WestJet). Let's assume this in fact is the case, why can't WestJet do the same on other city pairs from Pearson where it already has a base and operates the NYC flights? This would be in line with City staff's demand to cap movements and slots, and save WestJet the cost of opening another base a stone throw away from Pearson. It's a win-win.

[CanadaEH]