Business Travel News - February 9, 2009 - (Page 14)

AVIATION Canada’s Porter Looks To The East To Carve Transborder Niche BY JAY BOEHMER Canada’s Porter Airlines is pointing its growing fleet of 70-seat Bombardier Q400 aircraft southward, stretching from its Toronto City Centre Airport base to embark on a year of fleet, frequency and transborder service growth. The carrier last March debuted service into the United States with seven daily roundtrips to Newark Liberty International Airport, then in November launched three dailies to Chicago Midway, expanding that to six daily weekday flights last month. As Porter is slated to take delivery of eight new Q400 aircraft, CEO Robert Deluce said the carrier is eying service between Toronto and Washington, Boston and Philadelphia. “There’s a real opportunity there and those three destinations are really on our shortlist. We’re in the process of talking to all of them,” Deluce said. “I don’t know which one will be first, but our fleet better than doubles by this time next year, so we’re going to be able to get to a fair number of additional destinations that are in that northeastern quadrant of the United States, and all within a short distance to Toronto. They’ll be readily served by our Q400 fleet.” Porter launched in 2006 with an initial focus on domestic Canadian destinations that now include Ottawa, Montreal, Quebec City Access the 2008 Annual Airline Survey see btnonline.com/airsurvey and Halifax. Deluce said the carrier is concentrating growth on destinations that extend within a 500-nautical-mile radius from Toronto City Centre Airport, which represents service of less than two hours per way, Deluce said. He added that the range of the Q400 does not limit Porter’s growth strategy. “An interesting statistic is there’s a greater population surrounding Toronto within a 500-nautical-mile radius than there is surrounding New York, since you do have a bit of that Atlantic Ocean off to your east side there. We can hit Midway, Newark, Washington, Philadelphia, Ottawa, Montreal—they’re all good cities with good population bases.” Though Porter chairman and former American Airlines CEO Don Carty called Porter a “rounding error” in terms of net capacity in the Canadian market, according to Deluce the carrier’s “focused growth” is making strides with corporate travel buyers. “Very strategic, very targeted, but any market we go into, we’re having an impact,” Deluce said. “We don’t represent a huge segment of the total traffic, but in the areas where we’re operat- ing, everyone is very cognizant of our presence.” Still Deluce said, “The path we’re on right now sees us probably tripling in size in the next roughly 15 months.” The carrier said that in Deluce. “We do have a series of products that we can offer and we’re very competitive with anyone in our particular marketplaces.” Duncan Bureau, vice president of sales and airline “The expansion is fairly defined, it’s not too ambitious, it follows a logical sequence, and we’re absorbing it quite nicely. ” ROBERT DELUCE Porter Airlines CEO each market it enters, a dedicated sales person is courting the corporate market. Though the carrier only distributes through Sabre, Deluce said plans are underway to add Travelport GDS. “Between Apollo and Worldspan, we ought to be able to enhance our presence. In due course, we’ll have them signed up as well,” Deluce said. Though the carrier has yet to build a network that rivals dominant north-ofthe-border competitors Air Canada and WestJet, Deluce said the carrier has made some headway with corporate clients. Royal Bank of Canada last year counted itself among Porter’s clients, with head of procurement infrastructure Ken Scott praising the Toronto City Centre Airport hub’s proximity to the bank’s downtown headquarters (BTNonline, Feb. 4, 2008). “We have a very strong and active sales and marketing group, and the sales guys are focused on the corporate travel buyers and those who have managed travel programs,” according to partnerships for Canada’s WestJet, said, “They’re a niche market player. They’re doing a good job, they’ve got a good product and right now they don’t really show up on our radar screen by the fact that they operate out of downtown Toronto. They’re probably more of a nuisance to Air Canada than they are to us.” Deluce last month said that privately held Porter has no plans to halt its growth plan amid the sustained economic downturn, claiming a consistent profitability from operations. “To grow is one thing, but to grow with some continued profitability is another,” Deluce said. “We’ve maintain ed fairly consistent profitability rates since March of ’07. We turned profitable after eight or nine months of operating, and we’ve been able to maintain profitability since. The expansion we have is fairly defined, it’s not too ambitious, it follows a logical sequence, and we’re absorbing it quite nicely. Our passengers are responding in increasing numbers.” ■ jboehmer@btnonline.com ■ ADVITO REVISES AIRFARE OUTLOOK DOWNWARD FORECAST YEAR-OVER-YEAR CHANGE IN AVERAGE 2009 CORPORATE AIRFARE Region North America Asia/Pacific Latin America Europe SEPTEMBER/OCTOBER 2008 FORECAST Intra-regional Intercontinental 8% to 10% 2% to 4% 8% to 10% 3% to 5% 8% to 10% 7% to 9% 8% to 10% 5% to 7% JANUARY 2009 UPDATED FORECAST Intra-regional Intercontinental 2% to 5% 2% to 4% 5% to 7% 2% to 4% -1% to 4% 5% to 8% 6% to 9% 3% to 5% Sources: Advito Industry Forecast 2009; Jan. 21, 2009, update BCD Travel’s consulting division Advito is predicting a more favorable pricing outlook for corporate travel buyers this year, advising clients that the previous magnitude of fare increases will abate in the face of flagging demand and substantially lower jet fuel prices. “Over recent months, the global economic slowdown has accelerated sharply and most advanced economies are now expected to contract in 2009,” Advito said. “In addition, emerging economies, including China, India and Brazil, are being hit harder than initially expected, even though they are still growing.”The tides began to turn last year amid a worsening global economic outlook. Before late September’s financial fallout, travel management companies forecast domestic fares would grow as much as 12 percent in 2009. Recent forecasts, however, showed more modest increases or even decreases this year (BTNonline, Nov. 17, 2008). Business Travel News 14 Monday, February 9, 2009 www.BTNonline.com http://www.btnonline.com/airsurvey http://www.BTNonline.com

Table of Contents for the Digital Edition of Business Travel News - February 9, 2009

Business Travel News - February 9, 2009
Contents
Inside Track
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Forum
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Car & Ground Transportation
Travel Management
Destinations
Washington Wire

Business Travel News - February 9, 2009