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| A Boutique Airline Hopes to Join the Jet Age | A Boutique Airline Hopes to Join the Jet Age |
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| TORONTO — Travelers actually like flying on Porter Airlines. It could be the Canadian airline’s formula of offering free premium beer and sandwiches, served by flight attendants in trim 1960s-era uniforms and, of course, the discounted tickets. | TORONTO — Travelers actually like flying on Porter Airlines. It could be the Canadian airline’s formula of offering free premium beer and sandwiches, served by flight attendants in trim 1960s-era uniforms and, of course, the discounted tickets. |
| But what travelers may love most about Porter is that it flies out of an airport on the edge of Toronto’s downtown. It’s a mere 10-minute cab ride or a vigorous walk from the city’s financial district. | But what travelers may love most about Porter is that it flies out of an airport on the edge of Toronto’s downtown. It’s a mere 10-minute cab ride or a vigorous walk from the city’s financial district. |
| The company now wants to expand that airport so it can add more flights and use bigger planes with jet engines, besides the turboprops it now flies. That’s where its problems begin. | The company now wants to expand that airport so it can add more flights and use bigger planes with jet engines, besides the turboprops it now flies. That’s where its problems begin. |
| Porter’s plan has sparked a political battle in Toronto with a proposal to amend a longstanding and contentious agreement that bans jets from the downtown airport. As part of its jet plan, which would allow the airline to finally serve all of North America, Porter plans to fill in hundreds of feet of Lake Ontario for a runway extension to accommodate the new planes. | Porter’s plan has sparked a political battle in Toronto with a proposal to amend a longstanding and contentious agreement that bans jets from the downtown airport. As part of its jet plan, which would allow the airline to finally serve all of North America, Porter plans to fill in hundreds of feet of Lake Ontario for a runway extension to accommodate the new planes. |
| The airport in dispute is formally known as the Billy Bishop Toronto City Airport. (Its airport code seems a jumble of leftover letters, YTZ.) It is better known as Toronto Island Airport, because it sits, somewhat uncomfortably, at the western edge of a series of islands that form one of Toronto’s major parks. | |
| “The enlargement, in New York terms, would be like proposing to land jets in Central Park,” said Adam Vaughan, a city councilor. “The Toronto Islands are an emerald, one of the most beautiful and revered parks in the city. The issue is: are we going to pave half a kilometer of Lake Ontario for one man’s private interest?” | “The enlargement, in New York terms, would be like proposing to land jets in Central Park,” said Adam Vaughan, a city councilor. “The Toronto Islands are an emerald, one of the most beautiful and revered parks in the city. The issue is: are we going to pave half a kilometer of Lake Ontario for one man’s private interest?” |
| That one man is Robert J. Deluce, Porter’s chief executive. Mr. Deluce, whose family has owned and sold a series of small Canadian airlines over the years, founded the discount airline seven years ago. But he had his eye on the airport even earlier. Before starting Porter, he struck a deal with the Toronto Port Authority that eventually allowed him to evict a unit of Air Canada, which was running a limited service to Ottawa from the island in 2005. That gave his new carrier exclusive access for its first five years. | |
| “If you’ve enjoyed some success at something, then you keep doing it,” Mr. Deluce, 60, said during an interview in his cluttered office in the island airport. Most people predicted that Porter’s high-service, low-cost formula would fail. Instead, it boomed. | “If you’ve enjoyed some success at something, then you keep doing it,” Mr. Deluce, 60, said during an interview in his cluttered office in the island airport. Most people predicted that Porter’s high-service, low-cost formula would fail. Instead, it boomed. |
| In 2005, before Porter arrived, Air Canada served only 25,000 passengers from the island airport. Last year, the airport handled about two million passengers, the overwhelming majority of them flying Porter. | In 2005, before Porter arrived, Air Canada served only 25,000 passengers from the island airport. Last year, the airport handled about two million passengers, the overwhelming majority of them flying Porter. |
| Porter’s fares are generally cheaper than those of Air Canada, its chief rival, on flights to Montreal or New York. Porter has also singled out smaller cities like Sudbury and Thunder Bay, Ontario, where Air Canada previously had a lock and priced accordingly. | Porter’s fares are generally cheaper than those of Air Canada, its chief rival, on flights to Montreal or New York. Porter has also singled out smaller cities like Sudbury and Thunder Bay, Ontario, where Air Canada previously had a lock and priced accordingly. |
| Porter’s airport lounges serve free espresso in china cups, the seats in its turboprops provide business-class leg room and a publishing house owned by Tyler Brûlé, the founder of Wallpaper and Monocle magazines, produces Porter’s unusually stylish | Porter’s airport lounges serve free espresso in china cups, the seats in its turboprops provide business-class leg room and a publishing house owned by Tyler Brûlé, the founder of Wallpaper and Monocle magazines, produces Porter’s unusually stylish |
| “We deliberately try to take you back a little bit in time to when travel was a little more fun,” Mr. Deluce said. “So we do the pillbox hats on the flight attendants, and there’s a bit of an element of what it was like in the days prior when people got dressed up to fly,” he said. | “We deliberately try to take you back a little bit in time to when travel was a little more fun,” Mr. Deluce said. “So we do the pillbox hats on the flight attendants, and there’s a bit of an element of what it was like in the days prior when people got dressed up to fly,” he said. |
| “It’s very effective,” said Alan Middleton, a marketing professor at York University who lives near the island airport and flies Porter because of the convenience. “It’s a nice airline to fly.” | “It’s very effective,” said Alan Middleton, a marketing professor at York University who lives near the island airport and flies Porter because of the convenience. “It’s a nice airline to fly.” |
| Now Mr. Deluce wants to make it bigger. Porter currently flies 70-seat turboprops made by Bombardier of Montreal, which give the airline access to Newark and Chicago. Longer-range jets would allow it to reach the Caribbean, Florida, Los Angeles and Vancouver, British Columbia. Without any advance consultation with the city, last month Mr. Deluce announced a conditional contract to buy 12 Bombardier CS100s, a new 107-seat jet that would do just that. | Now Mr. Deluce wants to make it bigger. Porter currently flies 70-seat turboprops made by Bombardier of Montreal, which give the airline access to Newark and Chicago. Longer-range jets would allow it to reach the Caribbean, Florida, Los Angeles and Vancouver, British Columbia. Without any advance consultation with the city, last month Mr. Deluce announced a conditional contract to buy 12 Bombardier CS100s, a new 107-seat jet that would do just that. |
| But for that purchase to go forward, the Billy Bishop runway would need to be longer. That proposition would require the city, the Canadian government and port authority, an independent federal agency that runs the ferry to the airport and which controls the land under the Porter terminal, to alter rules governing the airport. The federal government and the port authority both said the city must first make its decision before they take any public position. | But for that purchase to go forward, the Billy Bishop runway would need to be longer. That proposition would require the city, the Canadian government and port authority, an independent federal agency that runs the ferry to the airport and which controls the land under the Porter terminal, to alter rules governing the airport. The federal government and the port authority both said the city must first make its decision before they take any public position. |
| It’s not just filling in the bay that’s a problem. There is also noise. Jets were banned from the airport to limit noise in 1983 as part of a political compromise that prevented the closing of the airport. Mr. Deluce said that the ban is outdated because new engine technology in the CS100 will make it about as noisy as one of Porter’s turboprops. His opponents find it hard to accept that because the jet has not yet made even a single test flight. | It’s not just filling in the bay that’s a problem. There is also noise. Jets were banned from the airport to limit noise in 1983 as part of a political compromise that prevented the closing of the airport. Mr. Deluce said that the ban is outdated because new engine technology in the CS100 will make it about as noisy as one of Porter’s turboprops. His opponents find it hard to accept that because the jet has not yet made even a single test flight. |
| A third touchy issue is the extremely congested road leading to the ferry docks and a pedestrian tunnel to the airport that is now under construction. | A third touchy issue is the extremely congested road leading to the ferry docks and a pedestrian tunnel to the airport that is now under construction. |
| The only area available for its expansion is a park. Recreational sailors, who abound in the harbor, are skeptical of Mr. Deluce’s claim that longer runways and jets won’t lead to an expansion of the zone where boats are banned. | The only area available for its expansion is a park. Recreational sailors, who abound in the harbor, are skeptical of Mr. Deluce’s claim that longer runways and jets won’t lead to an expansion of the zone where boats are banned. |
| “We won’t get everybody on board,” Mr. Deluce said. “There are still some who would like to turn the airport into a park, and everyone knows that’s never going to happen.” | “We won’t get everybody on board,” Mr. Deluce said. “There are still some who would like to turn the airport into a park, and everyone knows that’s never going to happen.” |
| Mr. Deluce won’t say how he plans to finance the $870 million jet purchase. Industry analysts are especially curious because they have long questioned the privately held company’s financial strength. It filed for an initial public offering in 2010, only to withdraw it. Mr. Deluce said that the airline has been profitable for the last two years, but declined to provide any details. | Mr. Deluce won’t say how he plans to finance the $870 million jet purchase. Industry analysts are especially curious because they have long questioned the privately held company’s financial strength. It filed for an initial public offering in 2010, only to withdraw it. Mr. Deluce said that the airline has been profitable for the last two years, but declined to provide any details. |
| Analysts note that its load factor, the number of seats filled on each flight, is below that of its two rivals, Air Canada and WestJet. In March, Porter had a load factor of 58.1 percent. Air Canada, by contrast, reported a load factor of 83.5 percent and WestJet was at 86.1 percent. | Analysts note that its load factor, the number of seats filled on each flight, is below that of its two rivals, Air Canada and WestJet. In March, Porter had a load factor of 58.1 percent. Air Canada, by contrast, reported a load factor of 83.5 percent and WestJet was at 86.1 percent. |
| Mr. Deluce said that Porter’s cost structure allows it to be profitable with a much lower load factor. But Ben Cherniavsky, an aerospace analyst with Raymond James in Vancouver, said that his reading of the data released at the time of the aborted I.P.O. suggests that Porter actually has higher operating costs than WestJet, excluding fuel. | |
| Mr. Cherniavsky credits Mr. Deluce with creating “a neat little model,” but he said that he finds the expansion plan misguided. | Mr. Cherniavsky credits Mr. Deluce with creating “a neat little model,” but he said that he finds the expansion plan misguided. |
| “You can’t build a hub out of the Billy Bishop airport,” said Mr. Cherniavsky. | “You can’t build a hub out of the Billy Bishop airport,” said Mr. Cherniavsky. |
| “He’s making the same mistake that just about every new airline I’ve seen in the industry make: they grow too much.” | “He’s making the same mistake that just about every new airline I’ve seen in the industry make: they grow too much.” |