More about Porter's business prospects
Actually Joe, I know a fair bit about business. I spent some of my career analyzing businesses and writing business plans. When you do that you begin to understand that all businesses are essentially the same. They have to generate enough money to pay their costs and make a profit. If they can't do that then they are going to die.
What was remarkable about the Porter startup was the amount of money that was raised. That is why I emphasized that in my analysis. The money was raised because Robert Deluce has the reputation of knowing a lot about the airline business, and that is to his credit, but the market place is a cruel task master. If Porter cannot generate the sufficient number of passengers to make a profit then the company will go down.
The other thing to keep in mind is that the players in a startup always play their cards close to their chest. Absolutely no one other than Robert Deluce and the Chief Financial Officer knows the financial situation of Porter. Deluce will remain confident and will tell everyone the airline is making money. Porter will continue to spend money on advertising right to the very end. I don't blame him for that. It is crunch time for Porter. Do or die. Porter is either successful in the next few months or they have to close up shop. The only other alternative is to reconfigure the airline in such a way that it can make a profit.
I was interested in your comment that you have heard that some of the venture capitalists are looking to cash out their investment. That is normal. Venture capitalists try and get their money out within 18 months and hope to double their money in that time. They don't always achieve that. Sometimes in fact they lose their money. Venture capital investments are high risk, and so they have to make a lot of money on the successful investments to cover the failures.
But I suspect the Porter investors are in a box because they can't get their money out. Porter is not earning enough to generate the income to give the investors back their money with a profit. An IPO is out of the question because the stock market has crashed. It is very hard to borrow money these days, especially for a private company, and banks do not lend money if it is to pay back investors. Finally, it is highly unlikely in these tough times that any other investor will buy out the venture capitalist's position.
Time will tell the story. My analysis is quite simple. I believe that Porter will have a difficult time establishing a customer base for routes other than Montreal, Ottawa and Newark. I may be wrong and then I guess you and your fellow airline enthusiasts will be happy. Frankly I won't be happy if it turns out that I am right. I don't like to see business fail because it hurts a lot of people.
What I want, and what the members of CommunityAIR want, is to recapture the Waterfront for people, not polluting air planes. Porter should go to Pearson. I hear there is a nice air traffic controller called Joe working there who would be very happy to welcome the company.
Bill Freeman
What was remarkable about the Porter startup was the amount of money that was raised. That is why I emphasized that in my analysis. The money was raised because Robert Deluce has the reputation of knowing a lot about the airline business, and that is to his credit, but the market place is a cruel task master. If Porter cannot generate the sufficient number of passengers to make a profit then the company will go down.
The other thing to keep in mind is that the players in a startup always play their cards close to their chest. Absolutely no one other than Robert Deluce and the Chief Financial Officer knows the financial situation of Porter. Deluce will remain confident and will tell everyone the airline is making money. Porter will continue to spend money on advertising right to the very end. I don't blame him for that. It is crunch time for Porter. Do or die. Porter is either successful in the next few months or they have to close up shop. The only other alternative is to reconfigure the airline in such a way that it can make a profit.
I was interested in your comment that you have heard that some of the venture capitalists are looking to cash out their investment. That is normal. Venture capitalists try and get their money out within 18 months and hope to double their money in that time. They don't always achieve that. Sometimes in fact they lose their money. Venture capital investments are high risk, and so they have to make a lot of money on the successful investments to cover the failures.
But I suspect the Porter investors are in a box because they can't get their money out. Porter is not earning enough to generate the income to give the investors back their money with a profit. An IPO is out of the question because the stock market has crashed. It is very hard to borrow money these days, especially for a private company, and banks do not lend money if it is to pay back investors. Finally, it is highly unlikely in these tough times that any other investor will buy out the venture capitalist's position.
Time will tell the story. My analysis is quite simple. I believe that Porter will have a difficult time establishing a customer base for routes other than Montreal, Ottawa and Newark. I may be wrong and then I guess you and your fellow airline enthusiasts will be happy. Frankly I won't be happy if it turns out that I am right. I don't like to see business fail because it hurts a lot of people.
What I want, and what the members of CommunityAIR want, is to recapture the Waterfront for people, not polluting air planes. Porter should go to Pearson. I hear there is a nice air traffic controller called Joe working there who would be very happy to welcome the company.
Bill Freeman
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