That must be the stupidest comment made by big mouth, and he made quite a few in the last 8 years. Way to go stupid…
Porter hunts for cash to bankroll expansion, U.S. flights
BRENT JANG
TRANSPORTATION REPORTER
Porter Airlines Inc. plans to raise $150-million to finance expansion as it mulls adding flights to five major U.S. cities.
"We're in the marketplace and we're raising some new financing for new aircraft," Porter president Robert Deluce said in an interview yesterday.
Nine-month-old Porter, which runs four aircraft from its base at Toronto City Centre Airport, expects to take delivery of another six Bombardier Q400 turboprops from early 2008 through early 2009.
"There's a good appetite for primarily debt financing," Mr. Deluce said, noting that Porter already has a cast of private equity partners. "A small equity portion will come from existing cash flow."
Porter is slated to begin service to Newark Liberty International Airport in New Jersey by early 2008, and intends to add Chicago, Boston, Philadelphia and Washington by 2010.
A 14-page report titled Blue Sky Opportunity, which Porter says was drafted by MBA students for an academic course but not endorsed by the airline, suggests that Florida would also be an attractive destination.
Porter's original plans called for flights within a 925-kilometre radius of Toronto, and while Florida is well beyond that distance, Mr. Deluce said he's studying Florida as a charter option, not part of the scheduled network.
Florida is within the range of the Bombardier Q400 turboprop aircraft, which could fly 2,500 kilometres. However, there are weight restrictions on planes taking off from Porter's base at Toronto City Centre Airport.
Mr. Deluce said the MBA students' report is accurate in producing a chart showing that the airline's breakeven level is based roughly on attracting 25 customers on the 70-seat turboprops. That's a load factor - the proportion of seats filled - of 35.7 per cent.
Winnipeg is another destination possibility. Sources say Mr. Deluce held talks last week with the Winnipeg Airports Authority, but no decision has been made yet on launching flights to the Manitoba capital. If Winnipeg doesn't make the cut, other possibilities include Thunder Bay, Quebec City and Windsor, Ont.
Porter's shareholders from the first round of $126-million in equity financing last year are: Regco Capital Corp., headed by Mr. Deluce; the Ontario Municipal Employees Retirement System's Borealis
Infrastructure Management Inc .; equity fund EdgeStone Capital Partners; GEAM International Private Equity Fund, part of the General Electric Co. empire; and Dancap Private Equity Inc.
As part of its growth strategy, Porter plans to introduce a frequent-flier program this fall, Mr. Deluce said. He noted that the airline posted its first monthly profit in May, and it has the strength to comfortably borrow money.
The upstart carrier isn't going unnoticed by WestJet Airlines Ltd. and Air Canada.
Both of the larger carriers, which use Toronto's Pearson International Airport as their eastern base, have tangled with Porter in frequent fare wars. Porter was launched last October with flights to Ottawa. Montreal was added in December and then seasonal service to Halifax began last month.
WestJet's Boeing 737s are too large for Toronto's downtown island airport, while Air Canada Jazz was forced to halt its service from the island site in February, 2006, after being ousted by a Porter affiliate that runs the air terminal.
WestJet chairman Clive Beddoe, who announced Tuesday that he's stepping down as chief executive officer in September, said he's skeptical about whether Porter has what it takes to be a serious threat.
"The public at large has historically not liked getting on turboprops. You're going to get banged around by turbulence a lot more. And looking out the window, seeing those propellers spinning is not very comforting to the flying public," Mr. Beddoe said. "We operate at 40,000 feet with a modern jet, so it's a much more comfortable and faster ride."
Mr. Deluce countered that Porter's planes are up to the task at 25,000 feet, providing a smooth ride and travelling speeds comparable to most jets on short-haul flights.
Mr. Beddoe said Porter will have a difficult task keeping costs down, given its small fleet, but such criticisms don't faze Mr. Deluce.
"I'm flattered by the attention," he said.
WestJet Airlines, Last Trade: Jul 30, 2007 10:54:06
C$ 15.400 Net Change C$ -0.040 % Change -0.26%
(ground crew) Rj was newer looking but Dash definately laid out better/ more room
its like elementary school all over again! the big bully chasing the little nerdy kid!
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