Air Canada considers leaving Billy Bishop
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Air Canada considers leaving Billy Bishop
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Re: Air Canada considers leaving Billy Bishop
I guess those 24 CRJ are going to Sky Regional now.
Flamecaway
Flamecaway
Re: Air Canada considers leaving Billy Bishop
what CRJ are you talking about?
Re: Air Canada considers leaving Billy Bishop
Wasn't AC paying a pretty penny for those landing slots? How would their absence affect Porter? Could they absorb the loss and offer more flights or routes?
Interesting to see this unfold. When Porter first started from the island, AC reacted as though they were a direct threat. Now it seems as though they're willing to leave them be. Understandable, Porter hasn't expanded at all. I remember rumours of a western expansion but the advent of Encore has squashed that. What's next?
Interesting to see this unfold. When Porter first started from the island, AC reacted as though they were a direct threat. Now it seems as though they're willing to leave them be. Understandable, Porter hasn't expanded at all. I remember rumours of a western expansion but the advent of Encore has squashed that. What's next?
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Re: Air Canada considers leaving Billy Bishop
Call me a cynic, but I have to wonder whether Air Canada's musings about its future at Billy Bishop may in part be linked to Porter's ongoing attempts to complete a sale/leaseback on its terminal: http://www.bloomberg.com/news/2015-01-0 ... minal.html. It seems that Porter may be making progress.
Re: Air Canada considers leaving Billy Bishop
This is posturing. AC is trying to get a better deal on its YTZ real estate as it negotiates w/Porter et al. Word is that there will be more Island flying in the future, not less.
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Re: Air Canada considers leaving Billy Bishop
WestJet will purchase the terminal, then purchase Porter in their initiative to compete in the East.
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Re: Air Canada considers leaving Billy Bishop
Don't know much about Porters operations but every few days my MS Outlook J-Email folder gets notification of Porter discount fares and sales, way more than AC or WJ. Having said that, the very few and in-between flights I did with them, service was quite good.
Re: Air Canada considers leaving Billy Bishop
Here's the $750 million dollar question. If (and it's a big if) Porter isn't profitable...and they are responsible for 95% of the airports revenues, what is the airport really worth to investors? That is what this statement from AC is telling investors.
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Re: Air Canada considers leaving Billy Bishop
Well..........from a pure corporate finance perspective, Porter could discontinue revenue operations tomorrow and the terminal and runways would still have tremendous value to other airlines interested in flying out of that location: the receiver-manager hired to sell the terminal building and the Toronto Port Authority would ensure that. Porter's profitability doesn't really say much of anything about the value of the underlying airport infrastructure in the medium to longer run.TheStig wrote:Here's the $750 million dollar question. If (and it's a big if) Porter isn't profitable...and they are responsible for 95% of the airports revenues, what is the airport really worth to investors? That is what this statement from AC is telling investors.
Re: Air Canada considers leaving Billy Bishop
It does, rather. If AC can't turn a profit there, and if Porter can't turn a profit there, it suggests nobody can. And if nobody can turn a profit there, nobody can make rent. Without rent the infrastructure becomes a white elephane with no commercial value.YYZSaabGuy wrote:Porter's profitability doesn't really say much of anything about the value of the underlying airport infrastructure in the medium to longer run.
DId you hear the one about the jurisprudence fetishist? He got off on a technicality.
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Re: Air Canada considers leaving Billy Bishop
Ongoing public speculation about yields aside, we don't actually know that Porter can or can't turn a profit at Billy Bishop because it's privately owned and doesn't have to report its financial results. As to Air Canada: it doesn't break out Billy Bishop as a reportable segment, so again, we don't know whether that operation is or is not profitable.photofly wrote:It does, rather. If AC can't turn a profit there, and if Porter can't turn a profit there, it suggests nobody can. And if nobody can turn a profit there, nobody can make rent. Without rent the infrastructure becomes a white elephane with no commercial value.YYZSaabGuy wrote:Porter's profitability doesn't really say much of anything about the value of the underlying airport infrastructure in the medium to longer run.
Moreover, if you read it carefully, nowhere in Air Canada's press release does it state that this operation isn't profitable; it says simply that AC is reviewing the "imposed" (interesting wordsmithing for a negotiated commercial lease, but whatever) terminal rates and terms: "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 Bishop operations based on current imposed terminal rates and terms,” the airline said in a statement."
Which could as easily mean that the operation doesn't hit internal return targets as that it's losing money. Quite apart from the fact that Air Canada can, within reason, load or unload costs from any of its operations as necessary to drive a desired P&L outcome.
Re: Air Canada considers leaving Billy Bishop
Does any one else think that it's a probably a bit of a stretch for Porter to propose to operate a 100 or 110 seat jet RELIABLY and without tech-stopping off of what MAY be a 5,000 foot runway (with very wet over-runs) on 4 or 5 hour flights to YVR and LAX? What will happen to the available payload on the inevitable wet and/or contaminated runway days?
What effect will the Union-Pearson Express have on YTZ airline operations? Won't the train to YYZ eliminate at least some of City Centre's supposed advantage? It would be interesting to see a race between 2 passengers from Union Station to their respective airplane seats at YTZ and YYZ and then on to YVR or LAX. Notwithstanding the free Steam Whistle, which trip will be quicker and more hassle-free?
What effect will the Union-Pearson Express have on YTZ airline operations? Won't the train to YYZ eliminate at least some of City Centre's supposed advantage? It would be interesting to see a race between 2 passengers from Union Station to their respective airplane seats at YTZ and YYZ and then on to YVR or LAX. Notwithstanding the free Steam Whistle, which trip will be quicker and more hassle-free?
Re: Air Canada considers leaving Billy Bishop
photofly wrote:It does, rather. If AC can't turn a profit there, and if Porter can't turn a profit there, it suggests nobody can. And if nobody can turn a profit there, nobody can make rent. Without rent the infrastructure becomes a white elephane with no commercial value.YYZSaabGuy wrote:Porter's profitability doesn't really say much of anything about the value of the underlying airport infrastructure in the medium to longer run.
There are a couple of things I find interesting about this sale. When the NBA forced the owner of the LA Clippers to sell the franchise Forbes had its value priced at about a billion dollars, it sold for 2. Why? First, although the Clippers aren't the Lakers, they still share the largest basketball market in the country, and secondly they were the only franchise for sale. Its easy to draw parallels to the sale of YTZ and see why buyers are willing to pay such a large sum.
However the bigger question, and the one Toronto City Counsel is going to have to answer is. What role is Billy Bishop Airport going to play in the future of the cities, provinces and countries infrastructure? We're all aware of Porters' ambitions to operate C Series jets from the island. But should YTZ be turned into a hub airport? 'Downtown' airports have traditionally catered to niche markets.
Porter has done a wonderful job of demonstrating the usefulness of the airport and provided a wonderful service, but its time for its monopoly and control to end. My inclination is that the runway extension will be approved, but as with everything in life there is give and take, and Porter will be forced to give up its stranglehold on the airport.
Re: Air Canada considers leaving Billy Bishop
Which agency do you imagine has the power and the motivation to force porter to give up its stranglehold?TheStig wrote:Porter has done a wonderful job of demonstrating the usefulness of the airport and provided a wonderful service, but its time for its monopoly and control to end. My inclination is that the runway extension will be approved, but as with everything in life there is give and take, and Porter will be forced to give up its stranglehold on the airport.
The TPA's sole - and legislated - motivation is to make the airport self-financing. That is to say, to run as profitably as possible as though it were a private company. That's a matter of law, and a matter of Geoff Wilson's bonus structure, without the slightest doubt. They don't have to be "fair to the market" or "serve the public of Toronto" or any other wishy-washy crap.
So if the TPA decides that the revenue from Porter-alone will beat the potential revenue from Porter-et-al - the stranglehold will stay.
Given AC's at best luke-warm support for operating out of YTZ (and Rovinescu's latest bullet through the foot hardly heats those waters any) - how would you decide?
DId you hear the one about the jurisprudence fetishist? He got off on a technicality.