June 12, 2007

Porter Air to Get Financing for Planes to Challenge Air Canada

Porter Airlines Inc., a startup commuter carrier, will arrange financing by September to more than double its fleet as it expands on routes dominated by larger rival Air Canada.

``We purposefully raised enough equity to make sure we had long-term sustainability,'' Chief Executive Officer Robert Deluce said in an interview yesterday. ``We expect we'll have in place by September the financing for airplanes five through 10.''

The financing will let closely held Porter buy six turboprops, bolstering the four with which it began flying in October. Toronto-based Porter now serves Montreal and Ottawa, and will add Halifax, Nova Scotia, on June 29. The company aims to start flights to Newark, New Jersey, later this year.

Porter first turned a profit last month, and June is ``already looking substantially ahead of May,'' Deluce, 57, said in an interview at Toronto City Centre Airport, located on an island near the city's downtown.

Deluce raised C$126 million ($118.7 million) for the four 70-seat Bombardier Q400s to start the airline. Porter may borrow against those planes to buy the next six, Deluce said.

Serving Newark will require U.S. Transportation Department approval of a transborder license, which has been held up by complaints from carriers including regional airline Jazz Air LP. Jazz is controlled by Air Canada parent ACE Aviation Holdings Inc.

Porter's agreement with the Toronto Port Authority to operate at City Centre Airport is a ``virtual monopoly,'' Jazz attorney Earl Cherniak said at a hearing last month.

By Hugo Miller
To contact the reporter on this story: Hugo Miller in Toronto on hugomiller@bloomberg.net

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