Wings Magazine

Features Operations
Making New waves on the island

The air transport landscape is littered with the names of operators who went head-to-head with the two mainline carriers on the Toronto-Vancouver route.


July 10, 2013
By David Carr

Topics

The air transport landscape is littered with the names of operators who went head-to-head with the two mainline carriers on the Toronto-Vancouver route.

013
Toronto’s iconic skyline may soon be dominated not only by Porter’s Q400 aircraft, but by CSeries jets as well. (Photo: Frederick K. Larkin)


WestJet filled a gap left by Canadian Airlines, but Wardair, HMY and Jetsgo disappeared by way of acquisition, orderly shutdown and collapse. Now, after using convenience and popular retro-service to transform Toronto’s sleepy waterfront aerodrome into Canada’s ninth busiest airport, Robert Deluce, chief executive of Porter Airlines is looking to spread out of the comfort zone.

On April 10, 2013, Deluce announced Porter was the “mystery buyer” for 12 Bombardier CSeries CS100 jetliners. The first CS100 test aircraft is scheduled to make its maiden flight in late June as Wings goes to press. The airplane would enable Porter to open routes from Toronto’s Billy Bishop City Centre Airport to western Canada, Los Angeles, Florida and the Caribbean, beginning with service to Vancouver in early 2016.

Advertisment

The order is conditional on changes to the airport’s 30-year operating agreement, including a 336-metre extension of the main runway and a lifting of a ban on commercial jet traffic. Seven years after launching Porter over the objections of a hostile mayor – who had successfully halted a plan to build a fixed bridge to the island airport – and CommunityAir, a local ratepayers group dedicated to shutting down the airport, Deluce is again making waves. And while not taking anything for granted, he is anticipating a smoother ride.

“This time we are not a paper airline,” Deluce told Wings. “We are a proven entity. That’s a better place to start from than where we started seven years ago. We have a proven track record. We are a strong regional carrier with a strong brand and we have been respectful of the environment. We picked the absolute best turboprop and we have picked the absolute best jet. Environmentally, it is leaps and bounds ahead of everything else available.”

It has also triggered a redrawing of old battle lines between the Toronto Port Authority (TPA), which owns and operates Billy Bishop City Centre Airport, and several members of city council, led by Adam Vaughan, a former local television journalist, whose constituency includes Billy Bishop, and who has accused Deluce of wanting to “cement” over the lake.

robert-deluce

 
Robert Deluce, president/CEO of Porter Airlines, is confident his vision of a new Billy Bishop Toronto City Centre Airport will fly. “We are a proven entity. That’s a better place to start from than where we started seven years ago,” he says.  
Porter-Q400  
Porter president/CEO Robert Deluce says Porter’s main hub at Billy Bishop is very much a connecting hub for those coming out of northern Ontario, Windsor and Quebec City, and even for those flying in from the United States. (Photos: Porter Airlines)


 

Changing perspectives
At one time a working harbour, most of the industry that lined the Toronto waterfront has disappeared and been replaced by a wall of glass condominiums, strips of parkland and marinas. A few freighters still appear over the horizon, but cargo traffic has dwindled and the huge lakers have given way to pleasure craft and dinner cruises. The Toronto Islands are a lush chain of islands and inlets, largely used for recreation and bookended by a charming small community of less than 300 residents to the east and Billy Bishop City Centre Airport to the west.

At different times and depending on the political hue of city council, there have been attempts to either evict the residents or bulldoze the airport for additional park space. Both have proven remarkably resilient and are an accepted part of life on a bustling waterfront. An expanded airport hasn’t dampened residential development along the waterfront. In fact, it has done just the opposite.

Ten years ago, Deluce hired an aerial photographer to produce an illustrated survey of the shoreline. Recently, Porter brought him back to update the survey. “It was amazing to see how much the waterfront has built up. He shot all the same shots from similar angles,” Deluce pointed out. “Most of the condominiums have been built since Porter began operating, and many developers use the proximity to Billy Bishop City Centre Airport and Porter’s 19 destinations as one of the advantages of living here. People walk and ride their bikes to get to this airport.”

A 338-metre runway extension to support the CS100 is likely the less controversial of the two proposals. A 10 per cent increase into the water on each end of the runway is not expected to disrupt marine traffic because the extension would be contained inside existing marine exclusion zones that already ring both sides. Prior to Porter’s announcement, TPA was already planning to fill in areas of Lake Ontario inside the exclusion zone to ensure boats stayed out. That plan has been put on hold over concerns that the intended filler might be too soft to support the proposed runway extension.

The debate might prove to be moot. Transport Canada is evaluating all Canadian airports to determine whether runway extensions are necessary to meet the Runway End Safety Area (RESA) standard. RESA is intended to reduce the severity of damage to an airplane undershooting or overrunning the runway. “Some airports like Pearson and Ottawa have pre-emptively moved to put in place a 150-metre enhanced RESA safety area,” Deluce explained. “Porter’s proposal already includes the 150-metre runway and safety area.”

Except for medical emergencies, jet aircraft are banned from the island airport. In 1983, the TPA (then the Toronto Harbour Commission), the City of Toronto and Transport Canada formalized the ban with a tripartite agreement intended to set the terms for operating the airport for the next 50 years. In 1990, Britain’s British Aerospace establishment (BAe) tried to obtain an exception by demonstrating the quietness of its BAe 146 regional jet at the Canadian National Air Show. The effort landed on deaf ears.

Setting aside the absurdity of an agreement locking in for 50 years an industry that can grow greener and quieter every 10, it can be argued that the tripartite agreement’s ban on engine type has outlived its purpose. “With the footprint of new aircraft today, you’ve got more noise coming off the [nearby] Gardiner Expressway in your condo than a Global Express landing at the Toronto Island,” said Sam Barone, the former president of the Canadian Business Aviation Association at a Wings roundtable discussion held last year.

“Nobody could have contemplated the possibility of the CS100 30 years ago when the agreement was first entered into – or even 10 years ago when we were starting to put Porter in place using the very quite Q400 turboprop,” Deluce insisted. “It is not really about jets versus turboprops anymore. It is about noise and there is no discernible difference between a CS100 and Q400. As long as the aircraft proves to be as good as advertised by Bombardier – and our order is conditional on that – it should be allowed to operate from Billy Bishop.”

The magic number according to the tripartite agreement is 86.5, or the average of three noise profiles. The Q400 slips in at 85.0. Bombardier is targeting 85.7 for the CS100, slightly above the noise ceiling, but still quieter than early de Havilland Dash 8 100s that were granted an exemption. Still, opponents of erasing the jet ban, including Councillor Vaughan, argue that the CSeries is only the beginning.

“If Porter’s proposed amendments are passed we will see a quantum leap in the size and operations of the Island Airport. There will be jets, the runways will be lengthened by filling in the harbour and lake [and] the number of flights will increase dramatically,” said Community AIR in a statement.

WestJet CEO Gregg Saretsky recently gave lift to those concerns when he mischievously suggested that with the extended runway and fewer seats he could bring Boeing 737s to the airport.

“For WestJet or Air Canada to say they would like to bring in a 737 or Airbus A320 that is nothing short of mischief. We looked at every available aircraft and the only airplane suitable is the CS100. Even the Embraer 190 is about 38 per cent above the tripartite agreement,” Deluce said, also pointing out that even with the runway extension, Billy Bishop will continue to be a severely slot controlled airport.

WestJet signalled its desire to fly out of Billy Bishop City Centre Airport when it took delivery of its first Q400 turboprop for its Encore regional subsidiary. The airline posted a picture on Facebook of the airplane flying over the airport with the caption: “Knock, Knock. Who’s there?”

Deluce described the runway extension as “marginal.” He was also the first airline executive to brand the CS100 a “whisper jet.” It may be when he brings a fleet of whisper jets to the marginally enlarged Billy Bishop that the heavy lifting begins. There are sceptics who believe that the CS100s in a 107-seat mixed cabin configuration will not be large enough and connecting opportunities at Billy Bishop not developed enough to support Porter as Canada’s third mainline carrier on routes such as Vancouver, Calgary and Los Angeles.

“We created our own room on the Toronto-Ottawa-Montreal triangle. We created our own room in New York. Nobody thought we would take the kind of market share we have successfully taken. We are giving our customers what they have been asking for. But we can’t do that with the Q400, which would require a fuel stop just to serve Florida. There is no reason that by extending the Porter brand and service we can’t enjoy the same level of success again,” Deluce said.

Porter, which operates as a private company, stopped publishing monthly load factors in April. “We introduced monthly reporting when we intended to go public,” Deluce explained. “It served a purpose and showed we had grown beyond the load factors we needed to establish profitability. Today, our concentration is ensuring our costs are right and our revenues are right.”

The fleet of 26 Q400s are flying at just over 58 per cent capacity, which given the airline’s cost structure, is sufficient to turn a profit and deliver a yearly dividend to its 1,400 employees. But even with a lean cost structure, the airline is going to have to fill up more of the CS100 to remain profitable. Deluce is not worried.

“Billy Bishop is very much a connecting hub for those coming out of northern Ontario, Windsor and Quebec City, and even for those flying in from the U.S.,” Deluce said. “We are doing a fair bit of connecting and we expect the CS100 will strengthen our regional Q400 operation. With a 60 per cent drop in average base fares, we may even cut into the leakage that is happening across the border to places like Buffalo and Plattsburg, and other airports on the west coast. This will become an important gateway and connecting hub to some destinations that will be attractive to both business and leisure customers.”

In addition to the 12 jetliners (and options for an additional 18), Porter has taken out options for an additional six Q400s, with deliveries linked to the success of the CS100 growth plan, raising the possibility for Porter Q400s meeting CS100 at hubs other than Billy Bishop.

That is on the horizon. First there is the thorny issue of approvals. Regardless of the ratio of for and against, changes to Billy Bishop City Centre Airport are divisive. The issue is expected to resurface at City Hall in late summer or early fall when councillors debate a study on the impact of the proposed changes that had been ordered by council in the spring and is being funded by the TPA. Deluce sees the 29-15 vote for the study as an encouraging sign. Others, including Councillor Vaughan, view it as gathering additional ammunition to sink the proposal. “I’m very confident that the move to protect the waterfront will end up protecting the waterfront,” he told Canadian Press.

Understanding the bottom line
Detractors of an urban airport on the Toronto waterfront will always paint jets as an environmental issue. But that is old-time thinking and appears to be at odds with the mood of the city. According to a 19,500-person survey commissioned by Porter, two-thirds of Torontonians in every corner of the city, including the waterfront, favour extending the runway and opening the airport to jets.

The airport is powerful economic engine for the area. Vancouver-based InterVISTAS Consulting Group reports that the airport pumps almost $2 billion into the local economy and has created 5,700 jobs, including 1,700 directly associated with the airport. Those are difficult numbers for council to turn its back on without being labelled anti-development, especially after overwhelmingly voting down a casino and resort complex earlier this year.

“The airport has experienced continued double-digit passenger growth and serves a large concentration of high-value frequent business and tourism travellers on its routes. It has become an essential facilitator in the growth of trade and tourism for Toronto,” said Geoffrey Wilson, the TPA’s chief executive.

A CSeries operation out of a high-density downtown airport like Billy Bishop would be an excellent showcase for Bombardier that could lead to added orders and more work at the airframer’s Toronto plant.

If city council plays to type it will delay a decision, making the island airport an issue in local elections to be held in October 2014. It is not clear whether Porter is interested in waiting that long. Don Carty, chairman of Porter and former chief executive of American Airlines parent AMR Corp., told the Wall Street Journal that the viability of Porter is not linked to the CS100. “It will be quite a different future if we don’t have that approval,” Carty said. “But Porter is a successful operation in its own right today. We need it to make it a bigger, more successful business. But, it does not jeopardize Porter’s existence if we don’t get it.”

Deluce, who learned to fly at the island in 1966 and who still keeps a Cessna 185 amphibian aircraft at the airport remains patient, but the clock is ticking. “We will need to get the approvals and put in place the infrastructure, including the modest extension of the main runway, so we are ready when those airplanes start to flow to us in January 2016.

“It is important to study [the impact] and have an open and honest dialogue. The proposal should be measured on the basis of its merit. I don’t think it should be put into never-never land while some non-supportive councillors try to figure out how to stop it.”