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Porter Airlines will post its first annual profit this year. (Kevin Van Paassen/The Globe and Mail/Kevin Van Paassen/The Globe and Mail)
Porter Airlines will post its first annual profit this year. (Kevin Van Paassen/The Globe and Mail/Kevin Van Paassen/The Globe and Mail)

After five years, Porter to post first annual profit Add to ...

Porter Aviation Holdings Inc. will post its first annual profit in 2011 after bolstering its passenger loads and fending off Air Canada.

Porter chief executive officer Robert Deluce said Air Canada ’s arrival in May at Billy Bishop Toronto City Airport worried some loyal Porter customers, but the competition has turned out to be a blessing in disguise.

Instead of wilting under the pressure from Air Canada, Porter’s load factor – the proportion of seats filled by paying customers – surged during the May-to-November period. Porter’s planes, which have been roughly half-full on average during most of the airline’s five-year history, flew nearly two-thirds full over the past seven months.

Mr. Deluce said Porter is gaining traffic through a combination of luring connecting passengers from cities such as Thunder Bay, Sudbury and Windsor, greater brand awareness in U.S. markets, seat sales and, surprisingly, the presence of Air Canada.

“We had Billy Bishop on the map, but Air Canada has done a great job of putting it on the map with marketing campaigns. They’re drawing people to the airport, many of whom had never been here before,” he said.

“Even if their customers remain loyal to Air Canada on the Montreal route, they’re trying us on other routes,” said Mr. Deluce, whose employees have been monitoring Air Canada’s 15 daily round-trips on the Toronto-Montreal service.

According to privately owned Porter’s data, Air Canada’s average load factor at Billy Bishop has hovered around 30 per cent.

“We count their loads as passengers are getting on and off every flight. That’s fair ball. That’s something that they did to us in Ottawa and Montreal during our first couple of years of operating,” Mr. Deluce said. “There’s somebody sitting with a clipboard. We don’t hide the fact that we’ve got somebody there counting.”

Air Canada has 30 takeoff and landing slots at Billy Bishop, compared with Porter’s 172 slots, leaving the regional carrier as the dominant force at the island airport located near Toronto’s downtown core. While Porter serves 17 destinations from its Toronto base, Air Canada’s entire Billy Bishop schedule is on the Toronto-Montreal route. Both airlines fly 70-seat Bombardier Q400 turboprops.

Air Canada spokesman Peter Fitzpatrick said the Toronto Port Authority, which oversees Billy Bishop, has heavily favoured Porter when allocating slots.

“We’re pleased with the performance so far at the island airport, particularly as the Toronto Port Authority’s slot allocation policy restricts us to one destination, effectively maintaining Porter’s monopoly position,” he said.

Porter lost $44.5-million between its launch in October, 2006, and the first quarter of 2010. The carrier also lost money during the final nine months of 2010, though it declines to disclose how much.

The holding company owns Porter Airlines Inc. and City Centre Terminal Corp., the landlord of terminal space at Billy Bishop and collector of fees from Air Canada. “Air Canada is a competitor but they’re also tenants at our terminal. Their rent is as good as anybody else’s,” Mr. Deluce said.

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