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DLD 109: Lost and Found

May 19, 2016

Dots

  • Toronto’s Billy Bishop Airport is on the agenda again because Porter Air is getting hosed there by the Canadian government and lobbyists.

Lines

  • Minneapolis to China is a big deal for Delta apparently. And we’re not sure why.
  • The non-lines coming for Delta from Seattle are interesting, too

Destinations

Other stuff

  • Alaska Airlines wants to displace Southwest as the commuter operator in California. Is that what the Virgin America deal was all about?
  • United is granting elite status bumps to people
  • American has a new business class seat coming
  • A new alliance for LCCs in Asia could be interesting

Enjoy the show!

 

 

3 comments on “DLD 109: Lost and Found

  1. DaninMCI May 19, 2016

    Keep up the good work guys. It’s like a soap opera, travel review and travel posse all rolled into one on your podcasts.

  2. DavidB May 20, 2016

    I feel the record must be put straight on the Porter report by Seth on this week’s edition of your podcast. The contention that our federal and provincial governments [I’m a Canadian, Ontarian and Torontonian] are in the tank for Air Canada is quite absurd. If anything, our federal government in particular is believed to be in the tank for Bombardier (to the tune of hundreds of millions of dollars of assistance, soon to move into the billions!), so would it not make sense that it would back Porter since that airline has a contingent {upon expansion of runways and authorization of pure jets at Billy Bishop Airport] order for a good number of C-Series jets?

    The facts are that YTZ has been restricted to prop-jets under an agreement with the city and the other two levels of government. Porter was quite happy with the terms of this agreement when it started up service at this airport, and invested in a new terminal, after agreeing to terms that pretty much gave it a monopoly from the airport. Its business plan was based on flying Q400s to a variety of nearby cities. After several apparent successful years, Porter planned a public offering which was suddenly withdrawn, much to the dismay of its original investors. Being a private company, Porter has never had to open its books or release load factors and other information that publicly owned carriers have, so nobody really knows the shape of its finances or if its flights are making money. (My experience on midday flights has been load factors of less than 30%, though I know its prime hour flights between YOW and YUL are probably at 100%.) Porter runs more seat sales than any airline around. A few years ago its president pledged an end to these sales, but within months this marketing strategy continued. Are its flights cheaper than AC or the competition? Obviously we know how yield management works. On my Porter flights I’ve always been able to book the lowest fares, though on one occasion where I was in need of a walk-up fare, they wanted $1500 to fly me one-way from EWR to YTZ. I passed and spent an interesting four days at the Crowne Plaza across from the airport watching Sandy arrive and devastate this part of New Jersey.)

    Two years ago, Porter made a deal and sold its YTZ terminal and pocketed $100 million+, obviously money to keep it afloat and possibly pay off some of its original investors. At the same time it was clear Porter’s original business model, based on Q400s, was not working (in a money-making, profit sense) as it was in passenger satisfaction. That led to the proposal to expand the range of its operations, flying C-Series jets to destinations as far as LAX and YVR, a very radical recasting of the original business plan.

    Of course, Porter needed to get the three levels of government to amend the YTZ agreement and permit pure jet operations. This also required expanding the main runway by 100 meters into the lake and harbour at both ends, plus substantial buffer areas. These changes would significantly alter ship/boat patterns around a very busy harbour. And the increase in passengers by adding up to a dozen additional flights on planes carrying twice the load as its current fleet would add pressure and congestion to the roads into/out of the terminal.

    It should be noted here, that this is not a Meggs Field or London City separated by parks or industrial/commercial activity. More than 100,000 people live in condominiums and apartments within a quarter mile of YTZ, and that number continues to grow. There is a school and community centre along the road used by taxis and other vehicles to access the airport.

    In the last provincial and federal elections, the airport and Porter’s expansion plans were a major issue for Toronto voters. Only one party appeared to support Porter, the then governing [federally] Conservatives, who had up until then been quite happy to approve Porter’s previous expansions. However, the voters of Toronto, and particularly those in the areas near YTZ, overwhelmingly voted for the two parties that opposed any such expansion by Porter. Not a single Conservative was elected in the city of Toronto in last fall’s federal election, and several previous members of parliament from that party were defeated. Similarly in the provincial election two years ago, the Conservatives were similarly shut out of the city. Liberal governments were elected at both of those levels of government, and in the recent municipal election, anti-YTZ expansion councillors were elected to city hall.

    So to say our government(s) were in the tank for Air Canada is hard to swallow, considering 80% of voters in the parts of the city nearest the airport rejected the party that would have signed off on the Porter/YTZ expansion.

    I fly Porter from time to time, though prefer taking the train to Ottawa or Montreal. Agreed, Porter’s a class act. (And it flies Bombardier’s Q400s which are built in Toronto a mile from where I grew up.) I think YTZ is worth having in my city, though for me — I live in the centre of the city, though not adjacent to YTZ — it’s just as easy to get to YYZ even by public transit. I also believe in the C-Series and was impressed when we toured Bombardier’s plant and development centre a few years ago at the SMD3. I have no objection to my governments supporting this project. (And I’ve been a long-time holder of Bombardier stock, alas worth about 1/5th of what I bought it at!)

    But I believe expanding YTZ is far more complex an issue than you made it out to be. I’ve attended three public consultation meetings where various aspects of the impacts were presented. In spite of liking Porter as an airline, and having an interest in the C-Series’ success, I also know what additional traffic into/out of YTZ will do to one of my city’s most vibrant residential areas.

    No, it’s not just as simple as being in the tank for Air Canada.

    Maybe it’s hard for Americans to believe governments can work on behalf of ordinary citizens and not just for corporate special interests. That’s what the Porter/YTZ thing is really about.

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