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Oh oh....maybe the Liberals are serious about no expansion


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The incoming Trudeau government, already facing a tough decision on whether to offer a $1-billion (U.S.) bailout to Bombardier, says it’s standing by a different political pledge that will end up hurting the Montreal aircraft maker and its troubled C Series plane.


The Liberals, who take office in Ottawa on Wednesday, confirmed Monday that they remain opposed to allowing jets at Toronto’s Billy Bishop airport – which would kill an order worth more than $2-billion to Bombardier.


Porter Airlines Inc. is prepared to buy as many as 30 of Bombardier’s C Series planes, but only if the runway at Billy Bishop Toronto City Airport is extended. The federal government is one of three parties that will rule on whether that extension can go ahead.


Authorization for runway extensions necessary to accommodate jets would require renegotiating a tripartite agreement between Ottawa, Ports Toronto and the City of Toronto.


Asked to clarify the Liberal position Monday, Trudeau spokesman Daniel Lauzon provided a copy of a June 4, 2015, letter sent to Toronto Mayor John Tory and city council, signed by Toronto-area Liberal MPs and the chair of the Ontario Liberal caucus, that pledged never to do that.


“We have … pledged not to reopen the Tripartite Agreement,” the letter said. “The Liberal Party’s policies on the waterfront are as clear as they are forward looking,” the MPs wrote.


This Toronto pledge leaves the Liberals in an awkward position. Quebec’s Economy Minister Jacques Daoust on Friday said he will ask Ottawa to match a $1-billion lifeline for Bombardier when the Liberals take office Nov. 4.


A request to join a bailout package and the expansion of Toronto’s downtown airport are theoretically separate discussions, but a government that kicks in $1-billion to support an airplane program that has struggled to land orders will find it challenging to kill the Billy Bishop expansion plan at the same time and cause the cancellation of a major order.


The Liberal pledge Monday backs up a promise made by Adam Vaughan, who, while a Toronto councillor, MP in the previous parliament and during a successful re-election campaign, opposed the Porter proposal. Mr. Vaughan was re-elected in the central Toronto riding that includes the airport.


“The jet issue. We’ve made a promise. We will keep that promise. No jets on the waterfront,” he said during his victory speech on Oct. 19.


That pledge was made before the Quebec government agreed last week to inject $1-billion into Bombardier and take a 49.5-per-cent ownership in the C Series program.


It was also made before Mr. Daoust said he would be on the phone to the new federal industry minister half an hour after that person is appointed.


“If the federal government comes in, the notion of risk completely changes,” Mr. Daoust told Bloomberg last week.


Porter wants the three entities – the federal government, the City of Toronto and Ports Toronto – that control the island airport to agree to 168-metre extensions of both ends of the runway to allow the C Series to take off and land. Porter would offer flights from Toronto to Western Canada, the United States and the Caribbean.


Porter’s order for 12 planes and options on 18 more is worth $2.3-billion at 2013 list prices, but is conditional on approval of the expansion.


The Liberal position on the Billy Bishop expansion and helping Bombardier financially is being closely watched in Quebec, where the party gained major ground in the federal election last month.


“It starts with Justin Trudeau,” said aviation consultant Robert Kokonis, president of AirTrav Inc. “Does he want to invest $1-billion? They went from extinction in [Quebec] to 40 seats. He’s talking about infrastructure, talking about job creation,” Mr. Kokonis said.


Bombardier has 243 firm orders for the C Series, which is two years behind the scheduled date of delivery to its first customer and more than $2-billion (Canadian) over the initial budget of $3.4-billion.


Porter spokesman Brad Cicero said Toronto City Council voted 44-0 to undertake a review of the airline’s proposal, including participation by all three members of the tripartite agreement that governs the airport.


“If after the full review is complete, and city council determines that it would like to proceed with the proposal, we believe that the federal government should consider the wishes of the people of Toronto when evaluating the proposal,” Mr. Cicero said.


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There is nothing stopping the Liberals in helping Bombardier going forward with a financial lifeline of $1billion dollars while reaffirming Liberal government policy of not allowing jets at Billy Bishop.

The two items are not mutually exclusive....

Furthermore there is nothing preventing Porter from completing the purchase of 12 CS100's for their customer base(and directly supporting Bombardier); it just is that Porter will have to fly out of Pearson/Hamilton/Ottawa instead of Billy Bishop where all jets have been since their commercial utilization since the 50's.

Jets have never flown out of Billy Bishop commercially (limited Medevac and/or emergency situations otherwise) ever; the Liberal declaration last even confirms that the government see's Billy Bishop as a regional airport versus a long haul facility like Pearson.

It's not like Porter has a cool two billion to spend on planes (they will borrow from EDC heavily or try IPO again) plus $1Billion for infrastructure improvements for the runways, facilities, infrastructure land side.

http://www.theglobeandmail.com/report-on-business/liberal-opposition-to-jets-at-billy-bishop-airport-kills-bombardier-order/article27074974/

http://www.cbc.ca/news/canada/toronto/island-airport-liberal-1.3300989

http://www.metronews.ca/news/toronto/2015/11/02/liberals-mum-on-jets-at-billy-bishop-airport.html

http://www.citynews.ca/2015/11/03/no-jets-at-billy-bishop-liberals-confirm-report/


Nobody from the TPA to Porter has said where the money will be coming from to build out the facilities....just approve the damn concept and money will rain down from the money fairies...

Flights of fancy IMHO....

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Porters strategy is to hold everybody hostage to it's 'conditional' order. Thankfully, the success or failure of BBD is not contingent upon 12 airplanes to a boutique airline. It is unlikely that the new government will reverse position on the purpose of TCCA.

There is another article out today from analysts recommending that the Feds NOT step in to assist BBD as that is yet another sign that the company's future is in fact at risk. You will note that the Caisse has not stepped forward yet either.

BBD has significant internal problems at the BOD level. Those need to resolve themselves before more capital flows in to the company.

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The Beaudoin's family stranglehold on the Class A shares will have to go....the Caisse won't jump in with a material investment until the dual class structure is reformed; which means loss of majority control of BBD.

I'm not sure the federal are onside on this issue for financial help(though likely) but it will have to come with some strings attached...

This is corporate welfare at its worst...

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The 'family' is holding out, but that'll change.Rudder...I don't think you're a Island local, so why the always decidedly nasty attitude towards Porter?

I have no animus towards Porter. Great product. Great staff.

Just don't like the political games played by the head shed. Too opportunistic. It is time to see if the company can compete on a level playing field. And it now appears the field is slowly tilting back to level.

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I can see the feds bribing AC to take the CSeries. Hmmm, maybe some rent adjustments at YYZ for everyone - would help AC disproportionately. Maybe a little tweak in the Ontario tax, too, to keep AC/Jazz buying Q400s so the work doesn't go to Mexico. How about using the high density 777s for refugee charters this winter?

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There is no doubt that AC will look at the C-series. However, selection criteria will change drastically from the crown corporation/patronage days of the distant past. I question, however, the level of sympathy that AC will feel at the provincial level with the heavy maintenance judgement potentially exposing AC to hundreds of millions in increased costs or damages.

In addition, AC must assess the risk of being saddled with yet another orphan fleet type of aircraft that are virtually impossible to re-market (think the first generation E190/E175).

Given that the modern era AC operates with an imperative of positive cash flow generation from each contributing segment, I believe that AC will order the C-series aircraft if and only if:

- the seat category and range makes sense within the planned commercial route structure

- the operating costs are in line with anticipated unit revenues factoring in realistic levels of competition and associated yield erosion

- the acquisition cost and terms of financing are more attractive than the alternative (which in this case is Boeing and AIrbus)

- there is a demonstrable quid pro quo either federally or provincially (or both) that AC can factor in to the overall financial justification for becoming a meaningful C-series customer

In CR you have a very savvy tactician who is incredibly situationally aware and thinks on several levels not just one. He is also entrenched personally and corporately in La Belle Province and therefore has well established ties to the key players in this discourse.

I am betting that this conversation has already been going on for some time now. It just has not reached a conclusion yet. If it does, some will be pleased and some will not.

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I think it's a long shot because of the overriding industry focus on CASM, rightly so. Despite the gap in seat capacity between the q400 and MAX

keeping the fleet simple solves problems by preventing them from occurring. You can spreadsheet yourself to death and I think Air Canada in the past has been guilty of that and putting itself in fleet situations where they're fitting a very specific type in too-specific a niche, only to realize the planned minuscule saving didn't materialize due to unknowns. Choose the bigger, common type, lower CASM, commonality for parts, training, ground equipment, and so many other support functions. The C-series should be a longshot for those reasons and more but when politicians get involved who knows. Also probably makes sense to string BBD along as long as possible from a negotiating standpoint with Boeing.

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I can see the feds bribing AC to take the CSeries. Hmmm, maybe some rent adjustments at YYZ for everyone - would help AC disproportionately. Maybe a little tweak in the Ontario tax, too, to keep AC/Jazz buying Q400s so the work doesn't go to Mexico. How about using the high density 777s for refugee charters this winter?

Isn't Air Canada a stronger, more independent airline now who just MIGHT, have the balls to resist federal intervention? If AC decides it does need/want the C series, wouldn't they just say no?

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From CommunityAIR today:

A Desperate Robert Deluce

Robert Deluce is fighting desperately for his jets proposal in asking that evidence‑based information be used to determine whether jets should be allowed at the Island Airport.

Porter, though, has yet to make any case for serious consideration of that proposal.

Deluce pitched then-Mayor Rob Ford for a quick decision permitting jets at the Island Airport in April, 2013. With no evidence justifying the pitch, he told Ford: “Our request is driven by strong demand from our customers to provide more affordable access to more destinations.”

Deluce insisted there was no time to waste: “To ensure the parties have sufficient time to finalize the amendment to the Tripartite Agreement, we require the City of Toronto's approval in July 2013.”

Of course, he assumed the Toronto Port Authority, now Ports Toronto, would be on‑side, without more. Turns out, even the TPA was blindsided. And back then, Deluce's close friends in the Harper Government would be there to rubberstamp as required.

Now he is pleading that the so called E.A. process be completed on the runway extensions at the Island Airport in the hope that the reports would be favourable to his jet proposal.

What Deluce is ignoring is that the federal government has made a decision not to open the Tripartite Agreement to allow jets for good reason.

Here’s why:

Jets belong at Pearson, not on Toronto's waterfront. With UP Express, downtown Toronto business people, Porter's target clientele, can speed to Pearson as quickly as they can navigate traffic chaos to get to the Island Airport. The UP Express cost $456 million of public money.

No study of the economic effect of expansion at the Island Airport on the people of Toronto, good or bad, has been done, or is being done as part of the current studies. The only economic study of expansion to date found no evidence that expansion would bring new travelers to Toronto.

No study of the economic down sides of the Island Airport expansion has been done, or is being done as part of the current studies, including potential losses in residential property values, and attendant property tax revenue losses.

The recent Oliver Wyman report, commissioned by Air Canada, basing construction costs on Transport Canada’s TP312 5th edition regulations, considers just the Airport‑side costs of expansion costs conservatively to be at least $1 billion. PortsToronto, estimating in January 2014 that expansion and groundside costs were too high for their funding model, wrote to the previous government requesting support for expansion. That letter included this:

“… However, the TPA does not have the financial capacity to support, or finance, what could amount to $100 million of groundside infrastructure improvements sought by the City of Toronto. At this point in time, it is clear that this project cannot proceed without the support of one of more other levels of government.

“To that end, we are requesting that the Federal, and perhaps your Provincial government partners, consider contributing towards the groundside infrastructure work. Undoubtedly PortsToronto would be unable to raise those funds to meet expansion costs and would again seek government assistance. …”

According to Oliver Wyman, an expanded runway would still be too short under wet, snowy or icy conditions, resulting in jet flight restrictions about 50% of the time.

$600M was spent on the UPX, which is currently operating under capacity. Expanding the Island Airport works at cross purposes to the UPX business model

Jet turbines are highly susceptible to damage or disablement when ingesting large birds, such as the waterfowl found in abundance throughout the Toronto waterfront. The air intake for the CS100 exceeds six feet in diameter.

Access to the Island Airport by emergency vehicles has long been identified as inadequate and problematic. The expansion proposal exacerbates these deficiencies.

Jet blasts pose significant risks to boaters. The Inner Harbour is the most intensively used recreational watersheet in Canada.

Aircraft wake turbulence is a potential but unstudied risk to boaters.

The Inner Harbour and Western Gap areas are currently major tourist draws; their value as such will be largely destroyed.

Lake access through the Western Gap would be restricted or prevented and use of the Toronto Inner Harbour would be greatly restricted.

Prospect of a bird cull on one of North America's major migratory paths is an expressed concern of the Toronto Region Conservation Authority. PortsToronto has refused to permit public examination of its current or proposed Wildlife Management Plans.

Ports Toronto’s 2012 Airport Master Plan detailed many shortcomings of existing operation (parking, landmass, facilities, access) that can't be resolved, given the absence of available land.

Given the increasing concern about climate change, no new investments in infrastructure that require consumption of fossil fuels to recoup that investment should be made.

Current studies are still based on 2013 studies that assume

  • a 202 slot airport operation despite newer 242 slot intention by PortsToronto [slot: a takeoff or landing].
  • 2.4 to 3.6 million passengers annually: this should be increased to 5.5 million passengers annually to match PortsToronto planning.
  • regulatory regime adopted in studies is TP312 4th edition (March 1993): expansion designs and studies should adopt TP312 5th edition (effective September 15, 2015). Continued use of the outdated TP312 4th edition will require ministerial exemption from the more stringent safety requirements of the currently-in-effect TP312 5th edition.
  • Exemptions currently in force at the Island Airport (steeper glide‑paths, grandfathered Code classification of runway) will continue; they need re-consideration in a expansion scenario with jets.

Mr. Deluce is defending his airline, and his own interests. We can understand this. But the decision made by the federal government was made on the basis of good hard evidence, in the public interest, and not in the interests of one private airline.

Perhaps the most important point of all, and the one that he refuses to face up to, is that jets at the Island Airport are simply incompatible with the redevelopment of the Waterfront for recreational and residential uses ‑ the largest urban redevelopment project in North America.

Billions of dollars have been invested in the Waterfront. New buildings have gone up to attract new residences, businesses and recreation. Already it attracts 17 million people a year.

The federal government has decided that a jet airport just does not belong on our Waterfront, and it is right.

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From CommunityAIR today:

The federal government has decided that a jet airport just does not belong on our Waterfront, and it is right.

per provided link in post - 'During a television interview last week, Garneau acknowledged that Liberal MPs from Toronto have long opposed jets, but noted studies, commissioned by Toronto city council, were under way about the advantages and disadvantages to having jets.

Garneau spokesman Jean Proulx said the minister is being briefed on the files, but “doesn’t have anything to announce.”

Brian, your statement appears to indicate you possess updated information with respect to the minister's final decision on the matter, would you mind passing it along to those of us left behind?

.

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Lakelad, as with the other campaign promises Trudeau is clearly committed to keeping, we are informed by reliable sources that this promise will also be kept.

But we don't anticipate there will be much of a public announcement on this in the short term.

Given Mr. Deluce's obvious efforts, we've encouraged our supporters to express their appreciation to Minister Garneau for his government's commitment to not re-open the Agreement.

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Let/s see, so it is expected that the Liberals will put the desires of a small number of YYZ lakeshore condo owners over the fate of Bombardier and the thousands of Quebec voters that may not like it. This will be interesting to see unfold.

Edited to admit I was wrong.... However I hope to be right when they deny bailout money to Bombardier.

Edited by Guest
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.

Porter Airlines works to win Liberals over for Toronto airport expansion as it enters debt-free era

Wed Nov 11, 2015 - Financial Post
Kristine Owram

TORONTO - The sale of a passenger terminal has left Porter Airlines debt-free, according to CEO Robert Deluce, giving the airline a financial leg up as it pursues a divisive plan to begin flying Bombardier Inc.’s CSeries jets out of Toronto’s downtown airport.

“Arguably we might even have the strongest balance sheet of any airline in the world, which is a good place to be if you’re contemplating acquiring new aircraft like the CS100 Bombardier aircraft,” Deluce said in an interview with the Financial Post.

“Certainly if we get the required approvals that would allow us to operate jets, we’ll be able to proceed with acquiring those jets without over-leveraging our financial situation.”

Porter was able to pay off its debt with the proceeds from the Billy Bishop Toronto City Airport passenger terminal, which was sold to Nieuport Aviation Infrastructure Partners GP in January. The terms of the sale-leaseback deal weren’t disclosed, but Bloomberg News reported at the time that it was expected to raise more than $750 million.

When Porter filed for an initial public offering in 2010, it had $306 million in long-term debt. The company eventually scrapped its IPO plan, citing unstable financial markets.

The airline’s strong financial position will be essential if its ambitious expansion plans come to fruition. Porter, which currently only flies Bombardier’s Q400 turboprop due to stringent noise regulations at Billy Bishop, hopes to begin offering longer-haul flights to destinations like Calgary, Vancouver and San Francisco using the CSeries jetliner, which has been dubbed the “whisper jet” for its quiet engines.

Deluce is up against fierce opposition from some Toronto residents and city councillors, as well as Liberal MP Adam Vaughan, but he said he’s not overly worried at this point.

“Our own sense is that (Vaughan) doesn’t speak for the GTA caucus, for the Liberal caucus, and whatever his personal agenda or platform is, it’s not likely to be the platform of the Liberal party,” he said.

A group of Toronto-area Liberal MPs sent a letter to Mayor John Tory and city council in June, vowing not to reopen the tripartite agreement between Ottawa, the city and Ports Toronto that governs Billy Bishop.

But a spokesman for new Transport Minister Marc Garneau said nothing has been written in stone.

“He’s very aware of that letter and takes it very seriously, but it’s not something that he committed to as minister of transportation yet,” Jean Proulx said in an interview.

“He’s deliberating, he’s consulting with officials, he’s getting facts and when he’s done that he’ll have something to announce.”

“Our objective is to make sure that council makes their decision based on facts rather than on fear or on false accusations.”

.

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I wonder how our new Government will view this?

Aviation has 'no hope' of carbon-neutral growth: study

  • 12 November, 2015
  • BY: Dan Thisdell
  • London

Oil demand for aviation is set to grow faster than for any other sector through 2040, leaving no hope for the industry to achieve its goal of carbon-neutral growth after 2020 without offsets from other sectors, the International Energy Agency has warned.

The problem, says the agency, is that improvements in aircraft fuel efficiency cannot counter emissions from increasing air traffic without access to far greater volumes of advanced biofuel than can be produced.

This forecast from the IEA in its World Energy Outlook report, covering the period to 2040, is based on conservative growth assumptions. The agency expects global revenue passenger-kilometres (RPKs) to rise at a rate of 3.9% a year, to more than 16 trillion in 2040. That figure is comparable with IATA's assumption of 4.1% growth but far short of the 5.0-5.5% expected by Airbus, Boeing and ICAO.

The IEA's expectations of aircraft fuel-efficiency improvement are broadly in line with the aspirational ICAO target of 2% improvement globally from 2021 to 2050. But while total aviation fuel demand has been rising by only a third as fast as RPKs over the past 15 years – owing in part to the advent of more fuel-efficient aircraft with more seats – it is to grow at half the rate of RPKs in the years to 2040, eventually reaching nine million barrels a day.

More broadly, the IEA expects that crude oil supply and demand will balance to push prices up to $80/barrel in 2020, up from around $50 today. But, the agency adds, the current response of OPEC producers including Saudi Arabia to protect or even increase market share by maintaining high levels of production despite low prices is driving high-cost producers – including those in offshore regions such as Brazil, and the US shale-oil industry – to cut back on investment.

One result, as is well known in the aerospace industry, has been a slump in orders for the helicopters that service offshore oil rigs. But, the IEA notes, this slowdown of investment in new oil-production capacity could so dramatically push market share towards the low-cost OPEC countries that world oil prices remain for much longer at their current levels.

IEA executive director Fatih Birol argues that while a "$50 world" may seem like good news for consumers, a serious energy-security risk is posed by having as much as 75% of world oil production coming from the often-unstable Middle East.

One region which represents a significant share of forecast RPK growth – Asia, including India – is "particularly vulnerable" to any oil-supply shock, adds the IEA.

While he regards that "$50 world" as an unlikely prospect, Birol warns that low prices would also slow the momentum towards development and adoption of alternative energy sources and fuel-efficient technologies. In aviation, he says, a low-price scenario would reduce the average increase in global fuel efficiency by 0.1% a year.

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.
Island Airport runway expansion now unlikely: Hume

No one should read too much into Transportation’s Minister Marc Garneau’s refusal to confirm jets won’t be allowed at Billy Bishop.

Thu Nov 12 2015 - Toronto Star
By: Christopher Hume Urban Issues and Architecture

Torontonians want to know what Justin Trudeau will do for them. Yet even before the electoral dust has settled, his government’s promise to kill the expansion of the Billy Bishop Toronto Island Airport is a gift that will keep on giving.

Though the battle rages still, it’s clear the political headwinds have shifted. Adding 200 metres to each end of the runway to accommodate passenger jets in an operation that has no place being there in the first place has less support than ever.

That, of course, means little in a city where even a proposal as inappropriate as this is taken seriously — and at the highest levels. The campaign led by Porter Airlines’ Robert Deluce has been extremely effective. His fans are numerous, especially among those who don’t live downtown.

But all the public relations in the world can’t make a silk purse of a sow’s ear, or turn a potential city-wrecker into a desirable urban amenity. Even as it is, the kids who attend nearby Harbourfront Public School may breathe some of the most polluted air in Toronto. It doesn’t come from Porter’s turboprops, but from the cabs that serve them.

At one point, a Porter ally suggested the school, which also houses a community centre, should be torn down for a parking lot. That anyone could float such a desperate proposal shows how high the stakes are. It also reveals the sense of unreality that has surrounded the file from the start.

Flying jets in and out of Billy Bishop would make a bad situation worse. And given the billions of dollars, both public and private, that have been poured into revitalizing the waterfront, sacrificing valuable land on the altar of corporate hubris would be self-defeating.

“The commitment we made during the election holds,” insists Toronto MP Adam Vaughan. “There are a lot of competing interests on the waterfront. The tripartite agreement sets the right balance and has given us the waterfront we have today.”

Transportation Minister Marc Garneau, who has refused to take a position, insists no decision will be made until after the issue has (yet again) been thoroughly studied.

If Vaughan is right that the Liberals won’t allow jets into the island airport, his party has done Toronto a huge favour. This is the sort of decision that eludes the city. Even when Deluce wrote to Toronto’s ex-mayor and big supporter, Rob Ford, in 2013 asking the city to approve expansion, he got nowhere.

The city isn’t mature enough to do the right thing. Bright shiny objects in the sky are enough to dazzle council long enough to sway opinions. The former federal government’s record on the issue wasn’t wildly reassuring, either.

'As a former astronaut, Garneau surely knows the importance of a soft landing.'

.

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The cabs serving the airport will pollute the air around the school.... hmmm so I guess there is no other traffic land or sea that causes exhaust emission around the school? Just asking ....

The centre is often used for performances, art exhibitions, sports events, and other local activities and of course all attendees come on foot. :biggrin1:

So I guess there should also be a push to ban traffic from around all of Toronto's public schools???? Like the traffic generated by parents who en masse drop and pickup their students along with the diesel school buses.

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