Porter selling off its terminal.

[WhiskeyWhiskey]

Things can't be going that great? Or Big expansion in the coming future?

http://online.wsj.com/articles/porter-a ... 1409326438

[peeelot]

I Guess flying Q400s around that are starting to age ( which I'm sure very expensive heavy checks are going to be due) with loads that aren't that great and selling most tickets at 30 % off while taking out full page adds in major national newspapers plus saving money to expand a runway. Hmmm I guess they are looking for a little capital to keep going.

[Heliian]

If you read the article it talks about how they are looking for a sale-leaseback deal to free up some capital for expansion. I wouldn't worry too much about porter until they start selling off all of their other assets.

You talk about their equipment like it's a burden, it's what makes the operation. Not like Jazz's clapped out POS 8's with the service to match.

[midwingcrisis]

What does "all of their other assets" consist of?

[Heliian]

^um, all of their other assets like planes and support equipment and FBO and hangars, office furniture, coffe makers, blah, blah, blah.

[midwingcrisis]

..anything of value is mortgaged (planes and chattels). Not sure and don't know about the furniture and coffee makers. The only strategic asset (terminal) Porter has albeit on leased dirt and needing to sell at this point does not look good. I wish all involved a descent outcome.

[photofly]

Could someone fix the apostrophe crime in the thread title, please?

Its, for the possessive pronoun, not "it's", which is a contraction of "it is".

[skymarc]

Planes are probably leased not sure they own them.

[MCB]

Could someone fix the apostrophe crime in the thread title, please?

Its, for the possessive pronoun, not "it's", which is a contraction of "it is".

Your just over reacting

[photofly]

Oh that hurts.

[GyvAir]

Your just over reacting

Alot of people would beg to differ..

[xchox]

..anything of value is mortgaged (planes and chattels). Not sure and don't know about the furniture and coffee makers. The only strategic asset (terminal) Porter has albeit on leased dirt and needing to sell at this point does not look good. I wish all involved a descent outcome.

OoOoOoO You used a fancy word. I'm impressed. Literally! I wonder how many people know the meaning of the word chattels? haha

[nortont]

No wonder they're selling the farm.....

[Valhalla]

Can anyone here name one other (excluding state owned) airline in this world that owns is own terminal?

This has been planned for a lot time. Buy the terminal for nothing when nobody wanted it, invest $49m in a building and prove that it's a valuable resource. The Wall Street Journal has speculated that it'll go for $500m. That is a very conservative estimate.

http://www.newswire.ca/en/story/1405236 ... able-asset

After this deal is done, Porter will own all its airplane outright, have zero debt and cash for expansion. That will be the best thing that's even happened at Porter.

[justwork]

Why is it worth so much?

[Beach 200]

I think $500m is a bit exaggerated. The fact that porter has to pay off its debt means investors want out. Secondly Porter still has to pay off the money to build the terminal. Thirdly I highly doubt they will pay off all the airplanes since they need a down payment for the $3.2B C series order. If that ever happens.

[watermeth]

That's a strategic asset and not just an "expensive to maintain money looser". Selling assests is less debts, or more cash, but less assets may prevent you to obtain this loan you want so much to finance that brand new car.
Why don't they rent it ?
Just saying, because we don't know everything for sure.

[KK7]

$500 million is the value of the business, not just the assets. Not only would someone be buying the infrastructure, but they would be getting the fee tagged onto each passenger coming through the terminal (2-3 million pax per year), money from advertising, money from rent from PD and SKV, rent from stores and restaurants operating in the terminal. My understanding is in Porter's beginning, they didn't want to build and operate a terminal, but who wanted to do that for a start up with a difficult road ahead of them? Now Porter has drawn a large number of people to the island every day and there is now business potential for a terminal operator.

Porter could take the income, or they can take the lump capital from selling it. Seeing as Porter wants to aggressively expand they frankly need money to buy airplanes. You can get this money from selling assets, raising money from investors, or raising money from an IPO, or a combination from the above. If they were in trouble I think it would have been wiser to hold onto the terminal as an asset and a source of income. Whether Porter exists or not, there is demand at the island and the terminal is a money maker, even if they were renting it out to another airline. Selling it is a good sign IMHO.

There's been lots of information or lack thereof from Porter that make employees wonder what the future is, positive or otherwise, and I see a lot of people worried about this piece of news. But personally, I feel this is probably the first positive piece of news that's come out in a while. It's a positive step to moving forward.

[rxl]

Porter is an airline, not a property management company. Correct?

[Valhalla]

Why is it worth so much?

The real question may end up being "how did Porter end up getting the terminal for nothing in 2006?"

As a comparison, lets look at another city airport that is close to the downtown core. Last year, London City Stansted Airport sold a 35.5% stake for £1.5 billion last year. That values the airport at £4.5 billion, which is roughly $8 billion CAD. Stansted carries 17.5 million passengers per year, which makes it roughly 7 times bigger than Billy Bishop at 2.5 million or so passengers per year. By that rough comparison, the Billy Bishop terminal could be worth just over $1 billion CAD.

Now, you may say that Stansted is a proven and established airport, and that makes it different. And you'd be correct. But I'd counter with the fact that the Billy Bishop airport has within it's capacity to double in size (hence why they're building a tunnel) within the confines of the current tripartite agreement.

There simply aren't very many urban airport close to major financial centers. And when the tunnel opens in a few months, I'll be able to WALK from union station to the terminal in 30 minutes. I can't walk from one terminal to the next at Pearson in that time. And that is why the Billy Bishop terminal is a very rare commodity.


http://www.ifminvestors.com/au/about-us ... ed-airport

http://online.wsj.com/articles/porter-a ... 1409326438

[watermeth]

Kk7, valhalla, you seem to understand the situation better than I am.
Would the new owner of this building and all the business coming with it be intereted in increasing the number of passengers going through and increase his benefits ?
Could he start lobbying to have more competition landing in YTZ ?

[Valhalla]

Would the new owner of this building and all the business coming with it be intereted in increasing the number of passengers going through and increase his benefits ?
Could he start lobbying to have more competition landing in YTZ ?

The new owner would only be interested in increasing it's business and further driving up the value of the Billy Bishop Airport Terminal. And Porter is absolutely not selling it's slots. Slot allocation will continue to be controlled by the TPA and is governed by ICAO rules. Therefore, since Porter has 90% of the current slots, it will be offered 90% of any new slots. That allocation rule has already been court challenged by Air Canada, and reaffirmed by Canadian courts.

So the new terminal owner will be keenly aware of the fact that their success is and will be directly proportional to Porter's success since Porter will drive 90% of the business at the terminal.

[WhiskeyWhiskey]

Interesting responses.

I personally believe that things aren't so rosey on that Island of theirs.

I've flown them many times and the service, quality, on-time performance has declined remarkably in the last 3 years. I also hear that a good percentage of employees are not content there. Rumors are that all the cleaning staff, and now the ground-handlers have unionized.

Some observations:
-They stopped serving Stella and Keiths for Steamwhistle
-Their free items are not as good anymore. All you get are stale almonds. Occasionally they will have some packages of hard crumbled up cookies. Before it was Biscotti, Porter Branded Almonds, and Walkers brand cookies.
-Used to get these little boxes with either breakfast lunch or dinner. I haven't seen those on my last several flights.
-The water bottles have gotten smaller. Half the size.
-Their aircraft are dirtier then a truck-stop hooker. They used to wash them.
-They don't even clean the terminal anymore. If any of you fly, look at all the dead bugs in the hallways, lights, windows when boarding.
-The seats have less room.
-When I flew last winter, one of the customer service girls was freezing and told me they don't turn the heat up high enough and don't supply them with winter jackets when they are working the gates.
-They apparently lost track of hundreds of bags last winter. (same thing happend to AC and WJ, but they had everything organized within a week.) Rumor has it, porter still had Christmas luggage early to mid January.
-Started charging for checked luggage.
-They have started overselling flights.

There are more things... They went from "Flying Refined" to "Slightly better than the other two."

So when I read about the selling of the terminal, plus the C-Series issues, and add to the fact the failed IPO, and the failure to expand to places like Detroit, Philadelphia etc which they had been advertising as future routes which never came to fruition makes me think something is seriously wrong over there. Add to that the fact they have a sale every 30 seconds.

I do wish them the best. It was a very refreshing and welcome way to fly when they first started.

[L-1011]

I too have seen a significant drop in service and quality at porter.

Not looking good at all.

[watermeth]

Valhalla, thx for your precision that brings another question, and I'm genuily curious: why would you sell a potential long term money maker ?