Another White Elephant on the Waterfront?
Is
the Toronto Port Authority is about to unveil a second white elephant to match
the International Marine Passenger Terminal at the eastern end of the harbour?
Shortly,
the Toronto Port Authority will open Phase two of Porter Airline’s $45 million
airport terminal at the western end of the harbour.
Porter
Airlines, the airport terminal’s owner and sole tenant promises to handle
somewhere north of a million passengers a year through its U.S. and domestic
expansion.
However,
if Porter’s recent transborder experience is anything to go by, will history repeat itself? According to data obtained by
CommunityAIR, summarized in the attached[1]:
- Porter’s Newark-Toronto
loads in 2008 averaged 49.73%. In the first six months of 2009, Porter
filled only 41.87% of its seats.
- Porter’s
Chicago-Toronto experience is even worse. For the first six months of 2009
it filled an average of 18.11% of its available seats.
Air
Canada, states that its US-Canada load factor was ~75% in a similar timeframe.[2]
“These
are devastating figures” said Brian Iler, Chair of CommunityAIR. “Porter’s
clearly not the vaunted success it portrays itself to be.”
There
are also questions about the Toronto-Ottawa-Montreal triangle.
- On March 24,
2009, Porter announced plans for daily weekday trips Toronto-Montreal to
double to as many as 18.[3]
So far this year they’ve averaged 13.
Unlike
Air Canada, Porter has not announced its load factors.
The
Toronto-Ottawa-Montreal market out of the Island Airport can be lucrative.
It was for City Express in the 80s and Air Ontario in the 90s.
However, their expansion out of the triangle
tells another story.
- City Express,
overcome by its debt load, ceased business in 1991.
- Air Ontario moved
to Pearson June 3, 2001 to handle its cross-border flights, reducing its
flights from the Island Airport to minimal levels.
Add
debt servicing on Porter’s Q400 fleet and new terminal to its massive expansion
and it could be deja vu all over again.
As
for the white elephant at the eastern end of harbour, in 2005, the Toronto Port
Authority completed work on the $10.5 million International Marine Passenger
Terminal at the eastern approach to the harbour to handle passengers travelling
on the Toronto-Rochester fast ferry.
In
2006 the Toronto-Rochester fast ferry ceased operations. Today the
passenger terminal will serve its purpose for only 8 days this year when it
sends off a Great Lakes cruise.
Build
it and they will come? Don’t count on it. In no time, Toronto could
have its matching white elephant at the western end of the harbour.
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