TRANSPORTATION REPORTER
Air Canada Jazz is buying 15 new Bombardier Q400 turboprops, opening the door for the regional carrier to deploy some of the planes soon after its hoped-for return to Toronto's downtown island airport.
Porter Airlines Inc., which has its own fleet of 18 Q400s, has enjoyed a monopoly on scheduled flights at Billy Bishop Toronto City Airport since it launched operations in October, 2006. A terminal company controlled by Porter chief executive officer Robert Deluce ousted Jazz from the airport in February, 2006.
Halifax-based Jazz wants to resume flights at the island airport later this year, possibly with existing Dash-8 turboprops in its fleet. But the aircraft order announced yesterday means Jazz could start using the 74-seat Q400 after the first of 15 turboprops is delivered in May, 2011.
The agreement also gives Jazz the option to buy another 15 Q400s, for 30 in total. No contract terms were released, but the turboprops have a list price of $29-million (U.S.) each. The first 15 Q400s will replace 15 50-seat regional jets.
Jazz, which trades as Jazz Air Income Fund on the Toronto Stock Exchange, flies regional routes on behalf of Air Canada under a capacity purchase agreement.
Air Canada has said that passengers are lobbying for the resumption of Jazz flights at the downtown Toronto terminal. Porter estimates it will carry nearly 1.6 million customers next year, turning what had been a sleepy airport into Canada's 10th largest.
"We remain interested in resuming service to Toronto island as soon as possible," Air Canada spokesman Peter Fitzpatrick said.
Jazz reported yesterday that its revenue last year fell 9.9 per cent to $1.47-billion (Canadian). The regional carrier posted a $92.6-million profit in 2009, compared with a restated 2008 loss of $9.4-million. In the fourth quarter of 2009, Jazz had a $20.8-million profit, compared with a restated loss of $86.5-million for the year-earlier period, including a "goodwill impairment" loss of $153.2-million.
The Toronto Port Authority, a federal agency that oversees the island airport, is reviewing how to allocate remaining positions for takeoffs and landings, or "slots." Porter is forecast to have 120 daily slots this spring, with at least 42 still up for grabs.
"The introduction of the Q400 NextGen aircraft is a perfect complement to our fleet of Canadian-built Bombardier turboprops and regional jets," Jazz CEO Joseph Randell said in a statement.
In a lawsuit filed in the Federal Court of Canada, Jazz questions whether the port authority overstepped its jurisdiction to effectively shut out Jazz for at least four years to allow an airline monopoly for Porter.
JAZZ AIR (JAZ.UN)
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