[jn_12]

But, if you go to Buttonville and then have to pay for transportation to a downtown meeting, that eats up a lot of the savings. That's one of the major benefits of Porter. Not to mention the time it takes to get from Buttonville to downtown. If you're meeting in the Buttonville vicinity, it would be worth it.

For business folk, yes. Re-read what i wrote above. A discount airline would put pressure on West Jet and AC by attracting average folk. This would take away from West Jet and AC's market, and they would be forced to lower prices. In turn, companies might be willing to go with West Jet or AC at the discounted price, since the service isn't THAT much different from Porter's. I worked for Porter. Trust me when I tell you that companies care about the cost of travelling as much as normal folk do.

Regarding fees, there was a report a while back that stated that YYZ was the most expensive airport in the world. To land a 747 there costs $11000, or over double New York's La Guardia.

It's true.

Sorry that the words are blackedout. It's a report from the air transport research society that I found a while back for a presentation i did for school. Either way, you can tell which one is YYZ.

I guess...but if the Ryanair model that someone laid out was replicated....the minute you checked a bag (something that AC and Porter do for free) the savings start to rot away pretty quickly.....no?

It'd be the same situation as Ryanair currently deals with. There are tons of AC/Westjet/Porter type airlines in Europe, but people still choose to fly with Ryan Air. In fact Ryanair is the largest airline in the world in terms of international passenger numbers working within this model. So it clearly works.

I think we all know how Canadian discount airfare companies all end up. If not, here's a hint -> JetsGo

Their problem was that they were flying out of normal airports. If they were flying out of Buttonville or Niagara or any "alternative" airport, they might have been able to avoid the high landing fees and survived.

That is how undercapitalized discounters who try to balance the books by eliminating such trivial things such as aircraft maintainance end up!

WestJet started life as a discounter.......and really still are.....they took the Southwest model and simply Canadianized it. Their biggest impact is that Air Canada had to adjust its model to the everything on board (food, blankets, etc) is ala carte airline we see today.

But they've morphed into nothing different. Prices are still on par with AC and Porter. They're not "discount" by any means.
Plus, the airline industry is probably one of the most heavily regulated industries in the world. If you look at Ryanair's incident history, it's on par with any airline. So just because you're a discount airline, you can't risk an incident otherwise that's it. People at Porter have worried that there would be a crash in its first five years because it would essentially mean the end of the airline.

 

[EnviroTO]

I read somewhere that the landing fees at Pearson include fees that many airports break out into different charges (such as de-icing fees, gating, etc.). Also, much of the IT infrastructure used by airlines at Pearson airport is provided by the airport whereas in many other airports airlines lease out space and need to fit it out themselves. I'm curious how apples to apples a landing fee comparison would be. Hopefully it isn't like comparing an apartment rental which includes all utilites and parking downtown to one that includes nothing and is located in the suburbs. I haven't noticed airfares from other Canadian airports being much different in price. Pearson seems to be continually adding new airlines to the airport so on a cost to reward basis the fees can't be too ridiculous.

 

[Chuck]

The true cost of a business trip involves more factors than airfare alone. Most professionals have charge out rates anywhere from $100-500+ per hour. For a downtown business, flying out of Toronto Island might shave 2 hours off the round trip travel time. For a lawyer, that could mean a difference of $1000 in fees. In many cases it would still be more economical to fly Porter out of the Island Airport, even if an airline offered free flights, no taxes or fees, out of Pearson.

 

[kEiThZ]

Ryanair would not be able to compete with Porter. The closest airport they could use economically would be Hamilton, not Buttonville (which would not be able to handle Boeing/Airbus narrowbodies and will be closing soon). That pretty much leaves most of the northern and eastern GTA and Toronto out of their catchment area. Though they usually use airports that are equally far away from the city centre in Europe, they can get away with that there usually because the local transit system or airport buses are sufficient to make it to the core. Somebody using Hamilton would have a much harder time getting to/from Toronto. And if they're coming from Scarborough or Pickering or Oshawa, you can forget it. They will never have a sufficient fare difference to make it worth the drive to Hamilton.

 

[jn_12]

The true cost of a business trip involves more factors than airfare alone. Most professionals have charge out rates anywhere from $100-500+ per hour. For a downtown business, flying out of Toronto Island might shave 2 hours off the round trip travel time. For a lawyer, that could mean a difference of $1000 in fees. In many cases it would still be more economical to fly Porter out of the Island Airport, even if an airline offered free flights, no taxes or fees, out of Pearson.

Depends on the company. When I worked at Porter I talked to many CEOs, Presidents, VPs, higher-ups and business types who were aware of the price of their ticket or knew when other airlines were offering better fares. Without painting everyone with the same brush, many won't even pay the $50 or $100 to move up to an earlier flight. So time doesn't seem to be everything to these folk.

 

[kEiThZ]

I read somewhere that the landing fees at Pearson include fees that many airports break out into different charges (such as de-icing fees, gating, etc.). Also, much of the IT infrastructure used by airlines at Pearson airport is provided by the airport whereas in many other airports airlines lease out space and need to fit it out themselves. I'm curious how apples to apples a landing fee comparison would be. Hopefully it isn't like comparing an apartment rental which includes all utilites and parking downtown to one that includes nothing and is located in the suburbs. I haven't noticed airfares from other Canadian airports being much different in price. Pearson seems to be continually adding new airlines to the airport so on a cost to reward basis the fees can't be too ridiculous.

Those costs are marginal and in no way justify the huge landing fees charged at Pearson. The reason Pearson is so expensive is because the federal government uses it as a cash cow and collects hundreds of millions in rent every year.

http://www.atac.ca/en/ourissues/advocacy/fed_rents.html

The Island does not pay any right now, because it is not part of the National Airports System yet. But they'll probably be in there soon. The requirement is sustained traffic of 200 000+ pax per year for 3 years consecutively. I am guessing this year or the next they'll qualify and start paying rent.

 

[kEiThZ]

That might be true for landing fees, but having a fully loaded 747 take-off from La Guardia will cost significantly more. First there is the cost of writing off the plane, then the lawsuits, the public relations catastrophe. Very expensive.

First of it's pretty pessimistic to assume that every 747 into La Guardia will crash and result in huge payouts. The stats definitely show that to be a lie. Flying is generally one of the safest ways to get somewhere. And when crashes do happen, very few turn into public relations 'catastrophes'. Anybody from Toronto stop flying Air France after the pilot came in hot and heavy in a thunderstorm and planted a 777 in that ditch near the 401? And that incident follow the Concorde crash the loss and after than incident we get the loss of an Airbus over the Atlantic. Yet, there's no mass boycott of Air France. Crashes have public relations consquences, but they scarcely become catastrophes unless the airline offers up repeat performances regularly, and even then a public backlash may or may not happen (like Air France for example). Finally, the financial penalties from any arising lawsuit can often be covered in large part by insurance which airlines pay on the aircraft, not on the airport they fly to. The insurance rate on a 747 is the same whether they are flying to La Guardia or Pearson.

 

[kEiThZ]

The true cost of a business trip involves more factors than airfare alone. Most professionals have charge out rates anywhere from $100-500+ per hour. For a downtown business, flying out of Toronto Island might shave 2 hours off the round trip travel time. For a lawyer, that could mean a difference of $1000 in fees. In many cases it would still be more economical to fly Porter out of the Island Airport, even if an airline offered free flights, no taxes or fees, out of Pearson.

Very true. Retainer fees can add up pretty fast. At some point, I'd even bet that a corporate jet or helicopter becomes worthwhile!

 

[jn_12]

Ryanair would not be able to compete with Porter. The closest airport they could use economically would be Hamilton, not Buttonville (which would not be able to handle Boeing/Airbus narrowbodies and will be closing soon). That pretty much leaves most of the northern and eastern GTA and Toronto out of their catchment area. Though they usually use airports that are equally far away from the city centre in Europe, they can get away with that there usually because the local transit system or airport buses are sufficient to make it to the core. Somebody using Hamilton would have a much harder time getting to/from Toronto. And if they're coming from Scarborough or Pickering or Oshawa, you can forget it. They will never have a sufficient fare difference to make it worth the drive to Hamilton.

Thanks for replying. I was wondering what you would say about this.

Let's say for the sake of this argument, Buttonville were to remain open. Could a Q400 operate from there? if it's a matter of runway length, could it be expanded? Combine the low cost of operating the Q400 with lower landing fees and I think you'd have a situation on par with what Porter has now. Now, if you undercut Porter/AC/Westjet's prices (which is clearly possible since Porter's prices aren't cheaper than AC/Westjet, but they make a profit on a lower load) and create a very no frills airline, would it not create some issues for the airline industry? I don't really buy the "public transit" argument because anyone can set up a bus at any time to service an airport. So the only thing I see standing in the way is a runway. I think if people could save $100 on each ticket, they would drive 30 minutes to go to an "out-of-the-way" airport. People in Niagara do it by crossing the border to Buffalo and many people would probably consider the border a pretty significant barrier.

 

[EnviroTO]

First of it's pretty pessimistic to assume that every 747 into La Guardia will crash and result in huge payouts. The stats definitely show that to be a lie.

I didn't say that. I assumed fully loaded 747's could not take off from La Guardia's short runway.

 

[kEiThZ]

I didn't say that. I assumed fully loaded 747's could not take off from La Guardia's short runway.

It can. It'll just have to carry less payload or less gas (= shorter range). I believe 747s doing US Transcon and trans-atlantic hops may have used La Guardia at some point.

 

[sjc]

(which is clearly possible since Porter's prices aren't cheaper than AC/Westjet, but they make a profit on a lower load)

It is worth pointing out that Porter's prices are not generally cheaper than Air Canada's prices on routes that Porter/Westjet doesn't serve.

For example, the cheapest fares on the Air Canada - Sudbury route (7 flights a day) have generally been $163. Porter announces early afternoon service to Sudbury and suddenly Air Canada has a $99 flight in early afternoon (the rest stay at $163).

I notice Chicago flights are a lot cheaper on Air Canada now than before they were before Porter started their Chicago service.

I don't know if there is a lot more room for new airline to drive down fares on the busiest short-haul routes. Westjet has done a pretty good job at keeping the longer-haul route prices down. Look what is happening in Yellowknife with the recent introduction of westjet service.

You need some core routes to build an airline upon (Porter has YTZ-YOW and YTZ-YUL, Westjet has the Calgary-Edmonton-Vancouver triangle and Regina/Saskatoon). I don't know that there are a lot of good routes left over, unless they are perhaps cross border medium/long range ones.

EDIT: Here is an interesting interview with the Allegiant Air CEO on how they have been succeeding as a low-cost airline.
Part I
Part II
Part III

And low-cost is important. As I like to say, you can be low-fare in 10 minutes. All you have to do is change the fares in your computer. Low-cost is a culture, an approach. It's a product that's recognized and focused and is not trying to be everything to everybody.

 

[sjc]

There are rumors that Porter might be considering an IPO this spring, although the Porter folks are saying that their current projects are all fully funded.

The rumour mill is turning again that entrepreneur Robert Deluce is planning to take his highly successful Porter Airlines public this spring. Some industry analysts claim he needs to raise funds to build Porter's new terminal at the downtown Billy Bishop Toronto City Airport and to complete Porter's Bombardier turboprop fleet to 20 aircraft by year-end.

Deluce has said his airline has been profitable since 2007 and he is steadily adding more routes in Eastern Canada and the Northeastern U.S. The company has a strong institutional backing already.

Some analysts are betting the IPO will come at the end of March, but Porter spokesman Brad Cicero said the terminal project, infrastructure and turboprop fleet is already fully financed. "There are no plans to raise new capital now," he added.

© Copyright (c) The Montreal Gazette

 

[BermudaTO37]

I read somewhere that the landing fees at Pearson include fees that many airports break out into different charges (such as de-icing fees, gating, etc.). Also, much of the IT infrastructure used by airlines at Pearson airport is provided by the airport whereas in many other airports airlines lease out space and need to fit it out themselves. I'm curious how apples to apples a landing fee comparison would be. Hopefully it isn't like comparing an apartment rental which includes all utilites and parking downtown to one that includes nothing and is located in the suburbs. I haven't noticed airfares from other Canadian airports being much different in price. Pearson seems to be continually adding new airlines to the airport so on a cost to reward basis the fees can't be too ridiculous.

Thank you for pointing this out. It is also my understanding and from reading what the CEO of the GTAA noted, all fees are included into the price and not separated out. So, one cannot compare actual prices. The only way would be to get the GTAA to provide a price break out so that everyone can see what the actual costs are to make an equitable comparison.

I have also looked at the flights on Porter and AC and I can tell you that they are on par with each other. So, if the fees are Pearson are so huge, how could it be that the prices are the same. I fly regularly to Montreal and I compare everytime I fly. It works out that the only savings I get if I fly Porter is the ride to the airport. That works out to $32 if I take the Airport Express bus and yes, more time to get there. However, I check in online, I glide through the express line (AMEX Platinum helps with that). I am normally through in about 10 mins.

Porter is great if you are doing short haul like Montreal, Ottawa etc. I will be flying them for the first time as of next weekend. I am looking forward to the nice things I have heard but when you compare the prices, they are just like AC especially when it comes to frequent flier points and so on. If you don't care about that stuff, you have the AC Tango fares or the Porter Firm fares.

Pearson has many international flights and that is what it is all about. There were 32 million or to be exact, 31.8 million users in 2008. They have been able to get additional flights added but they have also lost some. So, Porter has their neiche which is short haul flights. I surely don't want to sit on a flight for over 2+ hours on a plane like that. Nice plane and everything but I am 6'1" and tend to clip my head alot along with my knees to my chin in the seat.

One last thing, I don't know about you all but I have had the great pleasure (NOT) of flying Ryanair and when I have to run across the tarmac to board a plane just to get the seat I want, then that is pretty harsh. In winter or when it is raining, you certainly learn to appreciate those air bridges a whole lot more. They may be successful because people want to get to places cheap but at the end of the day, I prefer to pay for a little extra to land at an airport closer to where I want to be vs the normal Ryanair airports that are WAY out of town and that you have to take a specific bus/train too. At the end of the day, it works out to be more about peace of mind because, when the plane lands, I go to where I need too vs for example, landing in Hamilton to take the GO Train/Bus or intercity bus to get back to Toronto. That is not saving me a whole lot cause my time is of importance and does have some value.

Plus, Ryanair is looking to introduce all sorts of new fees on the aircraft. Heaven help us all if they start charging for using the bathroom. I know that in some places in Europe that is normal but there is someone sitting there cleaning the toilet after every use or handing you a towel to dry your hands (specifically Italy). Who is cleaning the toilet after each use in the plane?? Not the flight staff. That is the ground crew and aircraft cleaners.

 

[jn_12]

I'm 6'1 as well and Porter's planes are roomy enough for me. I've also seen people much taller flying all the time, so you should be fine. Also, for the longest time Porter didn't have fingers that went out to the plane and this is an airline that was aiming for business travellers. Trust me, it sucks when you have to stand outside to board flights when it's -20 and the wind is coming off the lake, but people get over it.

As for Ryanair, I think peoplefly with them knowing what they're going to get with them. For a lot of people, fare price is a big deal and a $100 difference is enough for someone to not make that trip because that extra $100 can be enough to put someone over their budget for a quick weekend getaway. I get that time is valuable as well, but most leisure travellers would never see having to travel an extra 30-60 minutes to or from an airport as being a deterrent for saving $100. I know i wouldn't/haven't.