Travels And Aviation NEWS: Porter Airlines flies high with confidence

Michael Ennis is about to turn 60 in April, 2011, meaning he will be forced out of his pilot's job with Air Canada in May. - Michael Ennis is about to turn 60 in April, 2011, meaning he will be forced out of his pilot's job with Air Canada in May. | Jennifer Roberts for The Globe and Mail

Sendai Airport is surrounded by waters in Miyagi prefecture (state), Japan, after a ferocious tsunami spawned by one of the largest earthquakes ever recorded slammed Japan's eastern coast Friday, March 11, 2011. (AP Photo/Kyodo News) - Sendai Airport is surrounded by waters in Miyagi prefecture (state), Japan, after a ferocious tsunami spawned by one of the largest earthquakes ever recorded slammed Japan's eastern coast Friday, March 11, 2011. (AP Photo/Kyodo News) | AP

Porter Airlines is brushing off concerns the impending return of Air Canada flights out of Toronto's island airport will force it out of business.

In fact the upstart airline, represented by a roguish raccoon, says it welcomes the competition. Porter will gain from the fees other airlines will be obliged to pay its parent company, Porter Aviation Holdings Inc., which owns the terminal building at Billy Bishop Toronto City Airport.

“We're actually pleased that other carriers are coming aboard now that Porter's made the airport viable for them to serve,” Porter president and CEO Robert Deluce said. “We're used to competing directly with Air Canada whether it's from Pearson, where they also serve the same market, or from other airports, Ottawa, Montreal and elsewhere, where our check-in counters are right next to theirs.”

Deluce said Porter also hopes to gain customers. Many Air Canada passengers have never flown out of Billy Bishop, he explained. Once those people are drawn into the executive-style lounge, with its comfortable leather chairs and cappuccino machines, they'll be persuaded to use Porter for flights to other destinations — such as Boston and Chicago — that Air Canada currently only services through Pearson.

“Chances are pretty good we'll converge some of those passengers over to loyal Porter fans along the way,”
Regional carrier City Express operated flights to Ottawa, Montreal, and Newark, N.J., from Toronto's island airport in the '80s. From 1984 to 1990 it flew about 1.5 million passengers to and from the downtown core. At its peak it had 13 aircraft and a staff of 350.

But City Express eventually went under, filing for bankruptcy in 1991 — only a year after Air Canada's regional carrier, Air Ontario, began flying out of the island airport — due to heavy debt, unpaid federal taxes, rising fuel costs, a recession, and the success of its competitor.

The difference this time around is that Porter is a strong company, explained Lazar, an airline expert at York University. He added Air Canada has never been found to have violated competition laws.

“I don't think it's going to be negative,” he said. “(Air Canada) is not going to be able to undercut Porter's prices. They'll be able to match them but they won't be able to undercut them.”

He said four-year-old Porter is now a respected airline with a fleet of 20 aircraft, a solid business model and strong management. Free beer and wine on board doesn't hurt, although it's a service Air Canada plans to copy on its flights out of Billy Bishop.

“It's easy to claim that (Air Canada) was the cause of a Jetsgo or a Canada 3000 or even a CanJet dropping out of the market, but I think that economic conditions and some weak management with a poor business plan in the case of those airlines were much more responsible,” Lazar said.

Air Canada officials said they did not wish to comment yet on their strategy for the move to Billy Bishop.

Still, increased competition is bound to affect Porter, perhaps further delaying an initial public offering that was planned for June 2010, but put off due to what Deluce called, at the time, an unfavourable market.

“Investors are not going to be keen on investing in a company which is being attacked competitively by Air Canada,” said D'Cruz.

Porter's load factor for February was 50.6 per cent, up from 46.5 per cent in February 2010, and it recently launched a television advertising campaign. Information released during last June's IPO indicated a 50 per cent load factor would be the airline's break-even point, explained Lazar.

Air Canada begins service out of Billy Bishop May 1, with 15 daily non-stop return flights between downtown Toronto and Montreal's Trudeau International Airport. Porter currently runs 20 return flights per day between Toronto and Montreal.

The lowest Porter fare to Montreal is currently $149 one way, which becomes $455.90 for a round trip when fees and taxes are included. The cheapest Air Canada tickets, which went on sale March 7, come to $444.60 for the same route.

Air Canada flew out of the island airport until February 2006, when City Centre Aviation Ltd., owned by Deluce's holding company, terminated Jazz's month-to-month island lease. Porter began flying out of Toronto Island in October 2006.

Air Canada isn't the only airline coming to the island. U.S. carrier Continental Airlines was granted 16 slots out of Billy Bishop. It hasn't specified when it will begin flying from there, said Suzanna Birchwood of the Toronto Port Authority.

2. A pilot’s quest to remain at the top
The trouble is that he will turn 60 in April, and under the collective agreement between the airline and the Air Canada Pilots Association, he will be forced out of his job on May 1.

In this latest chapter in the long-running battle over the airline’s controversial mandatory-retirement policy, Mr. Ennis filed a complaint Friday with the Canada Industrial Relations Board, arguing that the union is declining to represent him in his quest to stay No. 1 at Air Canada until he turns 65.

Seniority is crucial because it determines which pilots win better-paid assignments on larger planes, and sets priorities for vacation time.

Knowing that Air Canada’s mandatory-retirement rule won’t be changing any time soon, Mr. Ennis has landed a job with Istanbul-based Turkish Airlines. He will start May 2, one day after he is formally removed from Air Canada’s pilot seniority list.

For Mr. Ennis, the assignment with Turkish Airlines will be a step down in pay and prestige, but he is adamant about working beyond 60. “My first choice is to stay with Air Canada,” he said in an interview from his home in Oakville, Ont., before heading for a workout at a local gym. “I’m in good shape. Everybody says I don’t look like I’m turning 60, for sure.”

Mr. Ennis, who started at Air Canada shortly after his 21st birthday in 1972, loves his job. “I’m No. 1, so I go wherever I want,” he said, listing some of the routes he flies – Hong Kong, Beijing, Tokyo, Santiago, Buenos Aires, Sao Paulo, London, Paris and Frankfurt.

Air Canada and Turkish Airlines are both members of the Star Alliance of global carriers, but it just won’t be same with the new employer, he said.

“It’s not right that I have to leave Canada,” Mr. Ennis said. “The world has changed, and many other airlines have changed it to retiring at age 65, but not Air Canada.”

Through Internet-based phone services such as Skype, he plans to stay in touch with his wife, Barbara, a former Air Canada flight attendant, and their son Ben, 27, and daughter Katie, 24.

Pilots with Mr. Ennis’s experience earn $230,000 a year and qualify for a pension of $10,000 a month if they retire at age 60. At Turkish Airlines, it is estimated that he will earn $150,000 annually.

“My wife knows that I would be a wreck if I stopped working,” said Mr. Ennis, who rose to the top of Air Canada’s seniority rankings in February, 2010, and has been in the top 10 for the past four years.

But his wish to stay in the job is opposed by many of his colleagues. Capt. Cory Brown, 33, said extending the retirement age to 65 will penalize younger pilots.

“Seniority is your entire life because seniority affects everything. When these older pilots say they want to work past the age of 60, it’s going to affect my lifestyle,”, who flies the 93-seat Embraer jet for Air Canada, mostly on routes within North America.

The Ontario-based pilot, who earned $113,000 last year, said older pilots should view it as their duty to “pass the torch” to younger colleagues.

Union officials argue that an internal survey of Air Canada pilots last year showed that 82 per cent of the respondents favoured keeping the retirement age at 60 or younger.

A group called the Fly Past 60 Coalition, however, is backing Mr. Ennis in his fight against Air Canada and the union representing the airline’s pilots. Raymond Hall, a lawyer and retired Air Canada pilot who heads the coalition, said there are more than 150 other retired pilots seeking to fly again.

3. Japanese quake shakes air travel
Air Canada cancelled its Toronto-Narita and Vancouver-Narita routes, but is hoping to restart service this weekend. An airline spokesman said its flights Friday were rerouted to Sapporo after the shutdown of Narita.

While the Japanese quake won’t have the wide-ranging financial impact of last year’s Icelandic volcanic ash that disrupted much of Europe’s airspace for weeks, the dramatic flooding of Sendai Airport serves as a stark reminder of the fragile nature of the world’s airline sector.

“It’s a disruption for a week or so for flights in and out of Japan, assuming nothing else happens,” said Jacques Kavafian, president of AeroFinance International, a financial consulting firm to the airline industry. “There could be two or three days of backlog to clear. There are problems still getting to and from airports that are still operating.”

The deluge of water that submerged Sendai Airport’s runways and terminal will have the largest impact on Japan Airlines Corp., All Nippon Airways Co. Ltd. and other Asian carriers, he said, noting that Sendai is a regional airport that focuses on short-haul routes within Japan and to China and South Korea.

Sendai, known as the “city of trees,” is a popular tourist stop for Japan’s cherry blossom tours in the spring.

The suspension of rail services and temporary closing of Narita and Haneda airports in Tokyo left tens of thousands of travellers stranded or grounded without departures.

Japan is becoming an increasingly important market for Air Canada, which plans to increase its Calgary-Narita non-stop service to five flights week from three, effective March 26.

Air Canada also hopes to expand service from British Columbia, though it decided earlier this year to delay plans for non-stop flights between Vancouver and Tokyo’s Haneda Airport, citing lower-than-expected demand.

On Friday, as an array of global carriers halted flights to and from Japan, change fees were waived.

“Air Canada has revised its ticketing policy for customers booked on affected flights to facilitate changes to bookings,” the carrier said on its website. “Those customers wishing to make alternate travel arrangements can do so without penalty, space permitting, using our online rebooking tool.”

The airline sector, already seeking to navigate through high jet fuel prices that have sent airfares soaring, is bracing for slowing growth in travel demand in 2011 after the industry roared back last year after the recession.

“Should oil prices weaken economic growth or [seat] capacity accelerate, this will weaken the ability of airlines to recover costs, and profits will suffer,” the International Air Transport Association cautioned this week.

AeroFinance International’s Mr. Kavafian said he and his business partners still plan to forge ahead with Maple Fun Tours, which wants to introduce Canadian holiday packages for Japanese visitors. The Vancouver-based tour operator said last fall that it wanted to start flights in June, but then decided to postpone the launch until mid-2012.

Mr. Kavafian, who is also chief executive officer of parent Maple Fun Travel, said there were snags in securing jets in a timely fashion for routes planned from Osaka and Nagoya to Vancouver.

WestJet Airlines Ltd. co-founder Mark Hill and former Air Canada chief financial officer Robert Peterson are part of the venture to tap the market for Japanese tourists.

4. Austin is first U.S. city to let fliers tag own bags
American Airlines announced today that it's the first U.S. airline to allow passengers to check their own bags. According to USA Today, the airline's six-month trial program in Austin, Texas, includes nine self-service kiosks with tag-printing capabilities.

While self-tagging is common at airports in many countries, including Canada, only airline agents have been allowed to do it in the United States.

After printing their tags from kiosks, passengers may place the tags on their luggage without agent supervision. However, they must still see an agent, who checks IDs, scans the tags for validation and sets bags on a conveyor belt.

Agents scan the tags that each contain a bar code and the destination airport code as bags go through the screening process.

The Transportation Security Administration has also approved a similar trial for Alaska Airlines and Air Canada, according to the International Air Transport Association, an airline trade group.

"It is one of the areas in the travel process that our customers have been asking us to streamline and provide them with better controls," said Craig Richey, American Airlines Austin general manager. "Our agents remain available for customers opting not to use self-tag."

Richey said the airline chose Austin as the trial site because of its "open layout and efficient passenger flow."

By
Neha Jain

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