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Porter plans to expand routes in U.S., Ontario

Porter Airlines

Kevin Van Paassen/The Globe and Mail

Robert Deluce is in fighting form, preparing Porter Airlines Inc. for new markets after withstanding a challenge from Air Canada.

Porter's chief executive officer is aiming to expand domestically and also has plans to start service to Washington Dulles International Airport within 12 months.

Toronto-based Porter, which has a fleet of 24 Bombardier Q400 turboprops, will take delivery of another two planes by next spring and will likely confirm orders for four more aircraft.

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"We have a half-dozen or more new destinations that we're looking at, and it's case of which ones offer the best rate of return and what's going to work best in terms of our overall route network development," Mr. Deluce said in an interview Wednesday.

Porter will eventually seek to gain access to Washington's Reagan National Airport, which would require U.S. customs pre-clearance facilities at Porter's base at Billy Bishop Toronto City Airport. Washington Dulles doesn't require Porter to pre-clear passengers in Toronto.

Another possible U.S. destination is Philadelphia International Airport, while options in Ontario include Timmins, North Bay and London, Mr. Deluce said.

He made the comments after Porter reported record-high passenger loads for June, helped along by a rebounding economy, increased awareness of its growing network and a three-day strike at Air Canada.

Since May 1, Porter has competed head-to-head at Billy Bishop against Air Canada on the Toronto-Montreal route, raising concerns that the country's largest airline might inflict pain on the smaller carrier. Porter had enjoyed a monopoly since 2006 at the downtown Toronto airport before Air Canada began operating there.

But Porter's load factor - the portion of seats filled by paying customers - surged to 64.6 per cent in June, up from 52.2 per cent in the same month in 2010. Last month's load factor set a new high for June for the carrier, and also established a record at Porter for any month, easily eclipsing its previous mark of 63.9 per cent last August, Mr. Deluce said.

Porter flew 203,000 passengers in June, up from 136,000 travellers in the same month of 2010. For 2011, Mr. Deluce forecasts that Porter will carry nearly two million customers across its regional network of 12 Canadian cities and four U.S. destinations. The airline flew 1.56 million passengers last year, including 1.26 million people through Billy Bishop.

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Porter Aviation Holdings Inc., the parent of the airline, is pondering whether to embark on an initial public offering after it scrapped an IPO planned for 2010, Mr. Deluce said. "We're looking at an IPO versus potentially a private placement, and which makes best sense, where's the appetite, the right chemistry and market conditions," he said.

Last month, 3,800 Air Canada customer sales and service agents went on strike for three days, benefiting Porter as some consumers opted to fly with the regional carrier.

Montreal-based Air Canada reported Wednesday that its June passenger load factor slipped to 84.2 per cent, compared with 84.7 per cent in the same month of 2010. Calgary-based WestJet Airlines Ltd. posted a load factor of 75.7 per cent in June, down from 78.2 per cent a year earlier.

Air Canada and WestJet have been stepping up their flight offerings against Porter in the Eastern Triangle of Toronto, Montreal and Ottawa.

"I think a little bit that WestJet is the odd man out so far in the Eastern Triangle. Largely, our competition is Air Canada in the East, and we seem to be faring quite well," Mr. Deluce said.

WestJet spokesman Robert Palmer said WestJet, which flies from Toronto's Pearson International Airport, has been holding its own since the airline increased its flights in the Toronto-Montreal-Ottawa corridor in early May.

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"Just two months in, we are already very much in the game," Mr. Palmer said in a statement. "We flew 30,000 more guests on the Eastern Triangle in May and June of this year, compared to last. With a better schedule, industry-leading service promises and a frequent-guest rewards program, WestJet is already having an impact on business travel in the Triangle."

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About the Author

Brent Jang is a business reporter in The Globe and Mail’s Vancouver bureau. He joined the Globe in 1995. His former positions include transportation reporter in Toronto, energy correspondent in Calgary and Western columnist for Report on Business. He holds a Bachelor of Commerce degree from the University of Alberta, where he served as Editor-in-Chief of The Gateway student newspaper. Mr. More

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