The Plot Thickens! Air Canada Sues YTZ

[ScudRunner]

So with the announcement that Jazz is buying the Q400's, hmmmmmmmmmmmmm



http://www.cbc.ca/canada/toronto/story/ ... earns.html

Montreal-based Air Canada said Wednesday it will sue for the right to resume flying at Billy Bishop Toronto City Airport.

The airline said in a conference call that it has launched a lawsuit in the Federal Court of Canada to resume flying to the Toronto Island airport where rival Porter Airlines is now the only airline allowed to operate.
Air Canada says it is suing for the right to operate at the Toronto Island airport.

The airline said it has "not received a satisfactory response" from the Toronto Port Authority, which oversees the operations of the airport, in negotiations to resume service there.

"We are anxious to get into the airport, our customers want it, and it is an opportunity we need to pursue," said CEO Calin Rovinescu. "We'll see what the courts say and we'll take it from there."

Air Canada has not flown into the island airport since it was evicted in 2006 and Porter gained exclusive access.

Tuesday, the regional partner of Air Canada — Halifax-based Jazz Air LP — announced it had signed a deal to buy 15 Bombardier Q400 NextGen aircraft. The purchase prompted speculation it would use the aircraft to provide service to Toronto Island.
Improves earnings

Also on Wednesday, Air Canada reported a smaller quarterly loss.

Canada's largest airline had a loss of $56 million in its fourth quarter, compared with a $727-million shortfall in the same period in 2008.

Douglas Reid, a professor of business at Queen's University in Kingston, Ont., told CBC News the smaller loss is hardly good news, and that Air Canada's situation is still "fragile," given its performance in 2009.

"Revenues were off 12 per cent [compared with 2008] ... operating expenditures were only off 10 per cent, their costs, excluding fuel, were up 3.3 per cent," he said.

Air Canada's performance is typical of the international airline industry during a recession. During tough economic times, airlines are typically among the first to see customer demand fall and the last to see it recover as economy improves.

"This is an industry that is very unforgiving, this is an airline that doesn't have very many friends, this is a labour environment at Air Canada that is ugly, and [the airline] is not going to be turned around in a very short period of time," he said.

The latest loss would have been bigger had it not been for $108-million gain on foreign exchange.

The latest quarterly net loss amounted to 25 cents per diluted share, compared with a loss of $7.27 per share in the fourth quarter of 2008.

Operating revenues fell by $150 million to $2.35 billion from nearly $2.5 billion a year earlier as fewer passengers flew because of the weaker economy, which forced the airline to lower prices.

Read more: http://www.cbc.ca/canada/toronto/story/ ... z0fBiYsSth

[Romantic Lung]

Brent Jang
Globe and Mail Update
Published on Wednesday, Feb. 10, 2010 6:25PM EST
Last updated on Wednesday, Feb. 10, 2010 8:14PM EST


Air Canada (AC.B-T1.380.064.55%) is aiming to lure corporate customers by adding 74 new daily flights in a crucial battleground while trying to thwart fast-growing Porter Airlines Inc.'s expansion plans.

Montreal-based Air Canada launched legal proceedings Wednesday, accusing Porter of having an “improper anti-competitive advantage” at Toronto's downtown island airport. The defendants are Porter and the Toronto Port Authority (TPA), a federal agency that oversees the Billy Bishop Toronto City Airport.

In Air Canada's quest to restore its financial health, the controversy about Porter's monopoly at the island airport has gained added importance. Air Canada, which avoided bankruptcy protection last summer after securing financing and negotiating new pension and labour deals, already has been forced to discount its business-class fares to fill empty seats at the front of its planes during the economic downturn.

The TPA is poised to “grandfather” Porter's stranglehold on 120 daily “slots” – takeoff and landing positions – at the island airport, Air Canada said in legal documents to back its application in the Federal Court of Canada for a judicial review of the TPA's slot distribution process announced late last year.

While the TPA has agreed to finally allow competition, the agency will give 50 per cent of any additional slots to Porter, meaning the Toronto-based airline could nab 46 of an estimated 92 slots expected to be divvied up in future.

The result would be that Air Canada and other carriers would wind up with a total of 46 slots at most. Air Canada counters that it needs 74 daily slots to be viable at Bishop airport, aiming to serve Montreal, Ottawa and Newark, N.J.

“For the past nearly four years, Porter has had exclusive access to slots at the island airport,” said Air Canada, which wants to use its Jazz affiliate to compete against Porter. Jazz filed its own Federal Court lawsuit in 2007 against the TPA and Porter, which have denied any wrongdoing.

Air Canada, in making submissions to have its new case heard, said it is seeking “an injunction to prevent the TPA from proceeding” with its strategy to allocate slots in a manner that still heavily favours Porter and allegedly abuses guidelines under the International Air Transport Association (IATA).

TPA chairman Mark McQueen said in an interview that slots will be distributed fairly.

“The process is wonderfully understood and there's nothing about the process that we're going to deviate from,” Mr. McQueen said. “We have not yet appointed an individual who is an IATA-approved person, but that person will follow the protocols.”

Privately owned Porter has emerged as the No. 2 carrier in the eastern triangle of Toronto, Montreal and Ottawa, surpassing WestJet Airlines Ltd. last year, while making strides in stealing business traffic from Air Canada.

“We're anxious to get into the airport. Our customers want us to do that. It is an opportunity that we need to pursue, and so we'll see what the court says, and we'll take it from there,” Air Canada chief executive officer Calin Rovinescu said during a conference call with analysts yesterday.

Mr. McQueen said Air Canada's latest legal move “is an unnecessary step. We're dancing as fast as we can.”

Air Canada is also concerned that TPA insists that Jazz make leasing arrangements with City Centre Terminal Corp., a company headed by Porter CEO Robert Deluce.

Besides nine Canadian cities in its network, Porter currently serves Newark, Chicago and Boston, and will be adding Myrtle Beach, S.C., at the end of this month. It also aims to serve Washington and Philadelphia by the end of 2010.

Air Canada announced Wednesday that its 2009 loss narrowed to $24-million, helped by foreign-exchange gains. The carrier lost $1.02-billion in 2008. Revenue fell to $9.74-billion last year from $11.08-billion in 2008.

In the fourth quarter, Air Canada lost $56-million, or 26 cents a share, compared with a $727-million loss, or $7.27 a share, in the same quarter of 2008. Revenue in the quarter was $2.35-billion, compared with $2.49-billion.

[x15]

This is upsetting.

Porter took the time and spent the money to attract people back to the Island airport. They invested heavily in something Air Canada and Jazz wanted nothing to do with really since the Air Ontario days. Now they see someone making some money they want to swoop in and take it for themselves.

Reminds me of the tactics used by AC when it was a crown corporation and it used bully techniques to put great airlines like Ward Air out of business. Max Ward ran a better airline. Air Canada thwarted Ward Air because they did most things better than they did and for less money. Now they are trying the same stuff with Porter.

[Rockie]

I wouldn't worry about it. The TPA's efforts to get Air Canada/Jazz to use the slots belonging to them on the island are extremely well documented, as is Air Canada's refusal to do so. When Deluce offered to use them AC was fully apprised and did nothing about it. Deluce didn't exactly outsmart Air Canada. Rather they handed the airport over to him lock, stock and barrel because they wanted everybody to go to Pearson and get on a 320 to Montreal instead.

Crying foul now will be seen for what it is.

[teacher]

True, however Deluce and Porter are no brain surgeons either. He saw a niche market able to compete with Air Canada and exploited it like a good business person. Air Canada is just doing the same albeit a little late. Nobody complains when WJ or Porter competes against AC but everyone gets in a fit when AC does the same. Air Ontario was making money hand over fist at the Island back in the day. Unfortunatly AC wanted to focus on the YYZ hub to their loss. It would have worked had the mayor closed the airport. The gambled and lost. On another note, AC might have neglected YTZ but they never left, they just didn't like the deal presented to them in order to stay.

[172PIC]

The good news is we still have the island airport to fight over.

[WaldoPepper]

our customers want it

I wonder if they'd still feel that way after flying porter

[Romantic Lung]

our customers want it

I wonder if they'd still feel that way after flying porter

Their (Air Canada) shareholders want it.

[moreccsplease]

Just watch where people will flock for Aeroplan miles as well as Elite, and Super Elite status, when Jazz makes it back in. Throw on a free alcoholic drink, and a [crappy] boxed lunch, match the prices, you see where this could go. Jazz also has the second best on-time performance out of any airline in North America (Hawaiin is #1).

[Meatservo]

I should learn to read more slowly and carefully. I thought the title of this thread was "the pilot thickens"; I came on here to sympathize, I've gained some weight recently too.