It’s not news that Porter claims to be making a profit already.

What’s missing in your story ["Porter Takes New York" January 19, 2008] is just how that’s been achieved:

First, Porter received a virtual monopoly for commercial flights out of the Toronto Island Airport from a federal government agency, the Toronto Port Authority.

Second, Porter received $20 million of federal government money as compensation for its untested claim for damages arising from the cancellation of the Island airport bridge – that’s a lot of seed capital for its startup.

Third, investors, including GE Asset Management, Dancap Private Equity Inc., EdgeStone Capital Partners, and  Borealis Infrastructure threw a massive amount of capital at Porter: $125 million – enough to allow Porter to pay cash for the four planes it flies.

 

With no debt, no lease or financing costs for its planes, gobs of taxpayer money, and a virtual monopoly, Porter can readily show an operating profit – even with load factors that might be substantially lower than industry norms – if like its competitors, it was to announce them.

 

But can Porter generate the kind of returns its investors would reasonably expect? That’ll require a massive expansion of its current four-plane operation. Can it do so out of the sub-standard Island Airport, with its extremely limited parking, jammed into an   residential neighbourhood increasingly distressed by the airport’s noise, pollution, and traffic?

 

We think not.

 

Brian Iler

Chair, Community AIR