Porter Airlines Inc. said Thursday that the Federal Court of Canada had dismissed two applications by Air Canada contesting the awarding of takeoff and landing slots at Toronto's downtown airport.
Porter, a private regional airline that currently enjoys a monopoly on flying out of Billy Bishop airport on the city's waterfront, said the court found the agreements between the Toronto Port Authority and Porter were "entirely appropriate".
The court ruling, issued July 21, said the allegations of wrongdoing were "meritless" and it found no evidence of unfair treatment toward Air Canada, Porter said.
Porter said it plans to pursue cost recovery related to the the dismissal of Air Canada's claims.
Air Canada was not immediately available for comment.
Earlier this week, Canada's largest airline posted bigger than expected quarterly earnings and raised its full-year forecasts, prompting analysts to upgrade its stock ratings and targets, and sending the shares soaring.
Air Canada had asked the Federal Court earlier this month to scrap the recent award of Billy Bishop airport slots, saying the allocation process was "fatally flawed".
The Toronto Port Authority, the federal agency that owns and operates the airport on the Toronto Islands, announced on June 24 that Porter had secured 44 of 90 new slots. Air Canada got 30 slots and U.S.-based Continental Airlines Inc. was awarded 16.
"We look forward to welcoming Air Canada's new service at the airport later this year," TPA chief executive officer Geoffrey Wilson said in a statement on Thursday.
Air Canada, through its regional feeder airline Jazz Air, flew out of the island airport until 2006 when it was evicted by the TPA and Porter. Air Canada and Jazz fly out of Toronto's much bigger Pearson Airport, about a 45-minute car ride from the city's downtown.
In court documents, Air Canada had said the TPA awarded the new slots by selectively applying International Air Transport Association guidelines, which give precedence to an incumbent airline.
The dispute marks the latest chapter in an acrimonious legal battle between Porter and Air Canada.
Air Canada and Jazz have initiated five legal proceedings alleging impropriety against Porter, the upstart airline said. Jazz abandoned the first three proceedings and has been ordered to pay about $600,000 in legal costs related to the lawsuits, said Porter.
This week, Porter CEO Robert Deluce said he was suing Air Canada because it revoked a free lifetime travel pass for him and his wife. Mr. Deluce said the airline agreed to provide the passes when his family sold Air Ontario and Austin Airways to Air Canada in 1986.