Porter Airlines Nearing Sale Of Billy Bishop Terminal.....

[vikingwarrior]

Gregory Smith basically says Porter may not be flush with that much cash from the terminal as might be seen if one scratches on the surface...

Terminal sale helps Porter Airlines’ balance sheet

http://www.thestar.com/business/2015/01/28/terminal-sale-helps-porter-airlines-balance-sheet.html


"Land registry documents show that a mortgage for $650 million from the Bank of Nova Scotia was placed on the passenger terminal.
InstarAGF president and CEO Gregory Smith said there often is no correlation between registration documents and financing details"

Bean, I'm sure most of the board is dying for you to chime in on this game of three card monty...

[MD2]

That's funny, this discussion reminds me of a movie called me, myself and my shadow!

[Lando Calrissian]

What a yutz you are. Not the same posters.

You've been made hay of so often on these threads that now you're seeing things.

[boestar]

And you're upset about a private transaction that has nothing to do with you exactly why?

After seeing other airlines being a drag on the government and taxpayers, it's a waft of fresh air to see Porter's creativity and success in the private sector.

Where does that say "upset" just a translation. Good for him someone finally got blood from a stone. I wish them continued success.

[MD2]

What a yutz you are. Not the same posters.

You've been made hay of so often on these threads that now you're seeing things.

Really? A member for a couple of weeks who already knows all about "these threads". Not that it's new though. Certainly there are some who have an axe to grind. If Porter builds its own terminal, it's a white elephant or a monopoly and the terminal should be controlled by a third party. When it sells it, its a sign of burning furniture or incompetency of the buyers who should also buy their Alligator Alley property! If Porter has a discount, it's because it's going out of business. If it doesn't, then it's too expensive. This inability to see Porter succeed or even engage in a factual debate is only driven by personal vendetta.

[anonymous]

Well..give us some facts Mr Deluce, then we can discuss them....oh, that's right....all you are allowed to talk about are platitudes and cliches...

[MD2]

The facts are there as much as they can be from a private company for those who are not blinded by envy and can perceive.

It is rather odd that you expect the CEO of a multi-million dollar corporation to come and explain the facts for you! What possible reasons would you have for that, and would you expect the same from Rovinescu or Durfy? Very odd indeed!

[anonymous]

As far as I know...Mr Deluce can say anything he wants...isn't that true? What stops him?

[UpperDeck]

I am the CEO of a private corporation. Trust me.....I have NO obligation to report to a member of the public---no matter how inquisitive---my business decisions.

Sure it's a VERY small private corporation but that doesn't alter my obligations.

[anonymous]

That stench wafting up from the waterfront these days has nothing to do with the sugar refinery. It’s coming from Billy Bishop Toronto Island Airport, where some odiferous deals are now unfolding.

Toronto Star January 29th 2015....

[Lakelad]

.

Toronto Island Airport deal lacks lift

Deal to buy Porter Airlines' Toronto Island facility raises questions.

Thu Jan 29 2015 - Toronto Star
By: Christopher Hume - Urban Issues

That stench wafting up from the waterfront these days has nothing to do with the sugar refinery. It’s coming from Billy Bishop Toronto Island Airport, where some odiferous deals are now unfolding.

Most obviously, Porter Airlines has agreed to sell its passenger terminal to a consortium led by InstarAGF Asset Management for an amount said to be as much as $650 million to $750 million.

That’s fine, except that Porter doesn’t own the land on which the terminal sits — it belongs to Ports Toronto — and that the building, believed to have cost $50 million-odd to build, isn’t worth anything close to the reported sale price..

Though details have yet to be revealed — don’t hold your breath for that — it seems the only reason anyone would spend such money on so tenuous an asset is an expectation that jets will be allowed to operate at the facility.

For the time being, a tripartite agreement between the city, the federal government and the TPA restricts both the type of aircraft and the number of flights per day. That agreement expires in 2033; but before then Porter CEO Robert Deluce hopes to get permission to fly Bombardier C-Series jets to and from Billy Bishop. They will enable him to enter the tourist market and hugely expand his traffic.

Ottawa and the TPA are officially neutral, but have done nothing to stop it. That leaves the ball in the city’s court, though no one’s sure yet what that means. Local councillor Joe Cressy has made no secret of his opposition to an expanded island airport. But he’s one vote of 45.

Too bad Mayor John Tory won’t be able to provide leadership — his job, after all — because his son runs a business at the airport. That puts His Worship in a conflict of interest, which means he will have to sit on the sidelines during debate on one of the most critical issues facing Toronto.

Billy Bishop is the Spadina Expressway of our time. To paraphrase what then premier Bill Davis said in 1971 when he cancelled the expressway that would have sliced through the heart of the city: If we’re building a city for airplanes, this is a good place to start; if we’re building a city for people, it’s a good place to stop.

Before jets can use the island airport, the runway will have to be lengthened by 200 metres at both ends. That would bring it within spitting distance of Ontario Place on the west and limit marine activity in the vicinity.

So why are corporate investors so willing to ante up? Do they know something we don’t?

Their investment only makes sense if the tripartite agreement is discarded and jets are allowed into the airport. Only then will the ridiculous sums add up.

This is not an exercise in community-building, after all; it has nothing to do with the civic economy or ease of travel.

Facts about the billions spent on waterfront revitalization count for little in the face of such overwhelming greed. These are men smart enough to see an opportunity, but stupid enough to kill the goose that lays the golden egg, even when it’s theirs.

.

[MD2]

Big difference between private & public companies, and those seeking investors versus those who are not. RD wants to impress people with the success of his enterprise but doesn't want to display the evidence. I learned what that implied when I was in high school. I certainly wish Porter all the best, but hot air doesn't mean much on this forum unless you're a balloon enthusiast.

Last time I checked Porter is a private company and the fact of the matter is that unless you are one of the investors, which clearly you are not, in spite of your strange expectations, no one at Porter, let alone its CEO, has any obligations to impress you.

The fact also remains, that for the handful of the usual suspects that have continued to attack Porter over the last couple of pages, it makes no difference even if Porter discovers the cure for all diseases, they would not relent, simply because it is a personal vendetta which has become clear at one time or another, the end!

[Sixsigma]

PortsToronto twitter feed this eve...

.@NoJetsTO Lease expressly subject to all terms of Tripartite Agreement. If Tripartite Agreement not renewed in 2033, terminal lease expires

[MD2]

dagger, this is the kind of philosophical argument that starts with nothing and ends in nothing. By your argument, there should be no bridges built, no roads built, no tall buildings, nothing new tried, because it's easy to kill any idea. In truth though, these ambivalent remarks bring Air Canada under question with regards to City airport. If Air Canada wants more access, what is it doing to help its expansion? Otherwise why should an airport operator be anxious to give more access to an airline that is threatening its very existence?! As for the airport, various surveys, and especially the growing traffic seem to indicate very high approval rate. And with Toronto growing and increasing events and activities, such as the Pan-Am games, multiple easy accesses are needed.

Sounds like AC is going to pull the plug on Billy Bishop

From the December traffic:

Billy Bishop Toronto City Airport Operations

While Air Canada's traffic and load factor at Billy Bishop Toronto City Airport increased in 2014 over the previous year, as part of its continuing cost transformation initiatives, Air Canada is assessing the viability of Billy Bishopoperations based on current imposed terminal rates and terms.

This has been an interesting discussion. This little bit was particularly interesting that days after the obvious was pointed out about Air Canada's lack of commitment to Toronto City airport, it announced that it might want to stop its service altogether, surprise, surprise! Is there anyone on the planet that doesn't know that if Porter was to be no more the very next day Air Canada would cease operations at City airport? (the thought of it brings smiles to the usual suspects!)

This started from Porter terminal being worthless, to Porter causing global warming or being too convenient for people to fly out of the downtown (it should be more difficult like North Korea!), to demanding more access then wanting no access, to burning furniture or questioning the sanity of some of the biggest names in the investment community to wanting to sell them Alligator valley property, and finally demanding to be told the facts directly and be impressed by Porter...!

[Thebean]

The Bean has been wracking up the miles and hasn't had time to author the next great Cdn novel on this subject. He will at some point.

However, you've gotta hand it to Porter for pulling this deal off.

In saying that, the deal doesn't establish any proof that the airline operation, (as opposed to the real estate enterprise), is profitable.

[DEFCON]

Why aren't anti groups such as the one represented by Brian Iler working to protect the waterfront environment they claim to care so much about by taking a stand against the real threat? The increased pace of high rise condominium construction in the downtown area and the corresponding increase in human filth generated remains the true and growing stain on the local environment; the Porter crusade is a red herring.

The way things are shaping up, it looks like there'll soon be tens of thousands of residents in downtown Toronto that will come to appreciate Porter for the close at hand service it offers.

[dagger]

The Bean has been wracking up the miles and hasn't had time to author the next great Cdn novel on this subject. He will at some point.

However, you've gotta hand it to Porter for pulling this deal off.

In saying that, the deal doesn't establish any proof that the airline operation, (as opposed to the real estate enterprise), is profitable.

The deal doesn't establish anything for me. You can mortgage your assets to the hilt, and get a lot of cash, but you invariably pay interest (or rent) according to the soundness of your business model and creditworthiness. We still have no idea what cash ends up on Porter's books, what the monthly cost of leasing the terminal back will be and whether that cost will be recoverable through higher fees or will be consuming some of those cash reserves. I remember when Air Canada first tried to sell 30% of Aeroplan for $900 million back in 2002-03 just before SARS and CCAA. It put a very high valuation on the property, but it wouldn't have saved the old AC from CCAA, only delayed it a bit longer. And it would have cost AC 30% of Aeroplan profitability.

I still think the buyers of the terminal expect it to be a casino/resort in a decade and make far more money. The Port Authority wouldn't be governed by the Tripartite agreement if it chose to turn the airport into something else. Not much the city could do about it.

BTW, somebody is going to have to bail out Bombardier before 2016, their business model is a disaster. The CSeries isn't selling well, the Learjet 85 has been scrapped, the transportation (rail, transit) division is in disarray, in both LaPocatiere and Thunder Bay (although BBD isn't wholly at fault for those situations). Bears a lot of watching.

[Guest]

Durfy? Very odd indeed!

Very odd indeed.

[Super 80]

The way things are shaping up, it looks like there'll soon be tens of thousands of residents in downtown Toronto that will come to appreciate Porter for the close at hand service it offers.

Maybe, but I suspect within twenty years most of those condos developments will be a dystopian hellscape slum and the Toronto police will be looking for helicopter gunships.

[Lando Calrissian]

If the jets roll in, of course it will be. The entire condo market could crash. I suppose that would be great for "job creation."

[MD2]

dagger, which of its assets does Air Canada actually own? How many terminals does Air Canada own? How many has it ever owned in its history? What are the terms of Air Canada's agreement of T1 lease? And don't you think if other airlines can negotiate a reasonable deal with airport terminals, then possibly Porter can do the same in a terminal that it built itself? The deal may not establish anything for you, but I have a feeling it does a lot for its intended audience. And if what you say is correct about Bombardier, then all the more reasons why it can't lose any of its contracts and perhaps should have more!

[MD2]

Why aren't anti groups such as the one represented by Brian Iler working to protect the waterfront environment they claim to care so much about by taking a stand against the real threat? The increased pace of high rise condominium construction in the downtown area and the corresponding increase in human filth generated remains the true and growing stain on the local environment; the Porter crusade is a red herring.

Precisely...although this crusade seems to be pretty good political ladder for some.

[dagger]

dagger, which of its assets does Air Canada actually own? How many terminals does Air Canada own? How many has it ever owned in its history? What are the terms of Air Canada's agreement of T1 lease? And don't you think if other airlines can negotiate a reasonable deal with airport terminals, then possibly Porter can do the same in a terminal that it built itself? The deal may not establish anything for you, but I have a feeling it does a lot for its intended audience. And if what you say is correct about Bombardier, then all the more reasons why it can't lose any of its contracts and perhaps should have more!

Irrelevant. Air Canada is a public trade company and there is vast material available that explains AC's assets, liabilities, etc in great detail. And if Air Canda chooses to add an asset, or sell an asset, it is accounted for in the quarter results, annual results, or annual information filing with securities regulators. If the lease terms on a terminal aren't specified, there is no secret as to the operating results, cumulative fleet and other asset value, debt instruments including interest rates, fuel prices, etc. There are little about AC's financial situation that isn't disclosed. As for Porter, the intended audiences as you call them include stakeholders who aren't necessarily customers, but are neighbours and a community being asked to fund transit and access to the airport. If Porter has as much money as it wants people to think - it continues to hide all information about the net proceeds of the terminal sale - then it should fund those improvements.

As for the Bombardier piece, it needs a lot more than Porter's business. Its' executive suite has become a revolving door, it is failing to meet a lot of delivery deadlines, its pension deficit is a huge hurdle - bigger than AC's pension deficit was at its worst - and the family control of voting shares is a large net negative for potentially raising funds on the open market.

[DEFCON]

" the family control of voting shares is a large net negative for potentially raising funds on the open market."

That's an interesting consideration.

[moeman]

If Porter can't come to a deal with it's new landlord regarding rent and such, does it shut it's doors? Would that necessarily be a negative for it's investors, now that the sale has gone through and it's apparently flush with cash? I'm sure the new owners have plans for that eventuality.