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The only reason Porter hasn't broken even is that they have put their money into asset purchases. Despite being on an aircraft buying spree and building an airport they are staying close to breaking even. Now that the airport is built and the bulk of their fleet has arrived why on earth would someone think they can't be profitable?
 
I would hope that Porter is profitable. I've flown with them four times, and have always liked their service. (Though last year flew Porter to EWR and Air Canada back, and found AC to be just fine).

My only concern is the expansion. Though I go to Sudbury quite often, I'd never dream of flying there. To be honest, I'd rather take the Ontario Northland local bus (I've taken Greyhound once to Sudbury, and am not in a rush to that again, but I found the slightly longer ON trip to be very pleasant). The airport is a long way from the city core. Halifax's airport may be farther, but at least has the 102 freeway connecting it with airport shuttles, which Sudbury doesn't have. The Chicago flights I have been on had low loads. So I some concern about the expansion plans - that's what killed Canadian airlines before, like Canada 3000 and Royal and Jetsgo. It could work this time, now that Porter has a decent set of possible connections at YTZ, and the Q400 is a good aircraft for this type of operation, but I wouldn't be buying any stock in it, as much as I've been converted into a fan of the airline.
 
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EnviroTO said:
The only reason Porter hasn't broken even is that they have put their money into asset purchases. Despite being on an aircraft buying spree and building an airport they are staying close to breaking even. Now that the airport is built and the bulk of their fleet has arrived why on earth would someone think they can't be profitable?
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I haven't look at the prospectus but I really hope they were not buying those planes and expensing them in the year of acquisition.....yikes if they were and all of the numbers supporting this IPO were prepped by the same accountants we might all be wise to stay away from this offering!!
 
EnviroTO said:
The only reason Porter hasn't broken even is that they have put their money into asset purchases. Despite being on an aircraft buying spree and building an airport they are staying close to breaking even. Now that the airport is built and the bulk of their fleet has arrived why on earth would someone think they can't be profitable?
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I would expect that the aircraft acquisitions would be amortized over a number of years so that there isn't a one year hit to their profits.

Isn't the terminal building being built by Porter's parent company REGCO (or one of it's other holdings, that's not Porter?) which is operating the Island airport?

Just saying, I don't see how that could affect Porter's profitability provided the purchases were properly accounted for...
 
I would assume they financed those assets rather than paying for them outright which meant the lack of cash on hand, all the funds pumped into assets, would mean higher borrowing costs. How they can have loans secured with 14 planes and no related borrowing costs in their expenses which total to 100% is beyond me. They have a loan from Leon's that comes due in 2012?
 
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EnviroTO said:
I would assume they financed those assets rather than paying for them outright which meant the lack of cash on hand, all the funds pumped into assets, would mean higher borrowing costs. How they can have loans secured with 14 planes and no related borrowing costs in their expenses which total to 100% is beyond me. They have a loan from Leon's that comes due in 2012?
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They do have borrowing costs......page 45 says this:

Initial Public Offering April 16 said:
Interest Expense
Interest expense was $9.3 million in Fiscal 2009 (four-month period December 31, 2008 - $1.9 million), compared
to $2.2 million in Fiscal 2008. In Fiscal 2009, interest expense increased due primarily to the interest on 10 new
aircraft loans added during the fiscal year and the full-year impact of the interest on the six new aircraft loans added
during Fiscal 2008 and the two new aircraft loans added during the four-month period ended December 31, 2008.
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The Porter fleet is now complete. Q400 Number 20 has been delivered and is expected to go into service on May 1st.

http://www.flyporter.com/en/press2010.aspx?id=113

Porter Airlines marked acceptance of its 20th Bombardier Aerospace Q400 aircraft today. This delivery is also the 300th for the Q400 program. Both milestones were celebrated at Bombardier’s Toronto assembly facility with Porter representatives, Bombardier employees and other guests. Acceptance of this delivery represents the completion of Porter’s original order from 2006, valued at more than $500 million USD.
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I wish they'd build a Porter lounge in St. John's, Halifax and Montreal... or at least Halifax and Montreal.

My first time flying anything other than Air Canada Jazz from St. John's to Montreal, and no lounge like Ottawa and Toronto Island have to enjoy. ;)

Are there plans to expand them to other airports in the future? I doubt St. John's is very far up on the priorities list but Montreal at least...
 
Lounges are expensive to maintain. They need enough passengers to justify them. And there's also the issue of location. They need to find space for a lounge and gates nearby. I doubt you'll see a lounge any place where they don't have a hub basically. That's why Ottawa and Toronto for now. And if they expand out east maybe we'll see something in Halifax. Montreal will probably be last I think.
 
Does anyone know if there is convenient space available in Halifax or Montreal? That might make a big difference.

Halifax and Montreal will both start seeing connecting passengers once YUL-YHZ starts up (Halifax more than Montreal). If this is a sign of increased YUL and YHZ service (perhaps the future holds flights to the US from those cities), then they would both be candidates for possible lounges.

On the other hand, since there are no more planes on order, any future expansion is likely to be some distance in the future.

I would expect you won't see any more major construction until 1) the IPO brings in some cash and/or 2) they start filling their planes and get their revenue numbers back up above their expenses.
 
^ There might be some available space for a lounge in Halifax. And maybe some ramp/hangar space to have a second maintenance base too.

I dunno about Montreal though.

And I haven't flown Porter for a while. With the new terminal, how do they segregate US bound passengers? Or do they segregate them at all? Do they get a separate lounge? That would be an issue in other airports where there are separate terminals or sets of gates reserved for US travel. That would mean Porter would have to have 2 lounges.
 
Right now, all passengers are combined into one lounge. There are three doors leading out of the lounge (A, B and C) that lead to the 10 gates and there are computer setups at each gate where you line up to check IDs.

They are still working on a separate US lounge which is supposed to be open this fall. There is space to put in US preclearance as well, should that get approved.

There are separate US and Canadian baggage areas.
 
^ That makes it interesting for Halifax and Montreal potential lounges. Would Porter need two lounges in those locations? Or would US bound travellers from those locations simply not get lounge access and services.

...and this is all premised on the assumption that Porter will launch US services from YUL and YHZ. I'd say Boston and New York/Newark and maybe even Washington DC from those locations can't be too far away. Just wait for the day we see Porter lounges in Boston, Newark and at Reagan!
 
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