Porter Airlines is expected to announce an order for the new Canadian-made Bombardier CSeries mid-range jets, a move that could put the Toronto-based regional airline on the map as a viable third cross-country carrier, according to a source familiar with the deal.
A senior Porter employee told The Huffington Post Canada Monday that the airline plans to announce the order at a press conference Wednesday. A Wall Street Journal report, confirmed by The Huffington Post Canada’s source, suggests Porter could place a firm order for around a dozen aircraft, as well as the option to acquire more in a deal that could be worth more than $2 billion.
The source says Porter is storing crates apparently containing the parts for a model of the CS100 that would be displayed at the press conference.
Porter Airlines said Tuesday it will hold a press conference Wednesday morning to announce "growth plans at its home airport." A Porter spokesman declined comment on whether the announcement was the unveiling of its reported contract for the CSeries planes.
"There are many reports and much speculation at the moment, which we cannot confirm," Brad Cicero wrote in an email to HuffPost.
The deal would make Porter the first Canadian customer for the CSeries, which has a range of 5,400 kilometres, double the range of the airline’s current fleet of Bombardier Q400s, which can travel up to 2,522 kilometres. The Montreal-based company’s new line of aircraft won’t see their first flight until June and won’t be available to customers until next year.
The deal will turn privately held Porter Airlines from a small regional airline into the third viable domestic carrier, the source said. A third domestic carrier would bring more competition to routes that are typically flown by the country’s biggest carriers, Air Canada and Westjet, and could bring down prices for customers.
“Right now we're rinky-dink ... we can go from our departure point to a 1,500 kilometre radius,” the source told HuffPost. “In the CSeries we could go over 5,000 kilometres, so you can see how it can open brand new markets.”
Right now Porter flies to more than a dozen cities in eastern Canada and the United States as far west as Chicago and south to Myrtle Beach, S.C., with their fleet of 70-seat Bombardier Q400 turboprops. Jets are not allowed to use the Billy Bishop Toronto City Airport on the Toronto Islands, where the airline’s main hub is located.
The source said that with the bigger aircraft, Porter would be able to access new U.S. destinations such as Los Angeles, Florida, Las Vegas and longer Canadian routes such as Toronto to Calgary or Vancouver non-stop.
While the acquisition would give Porter the ability to "criss-cross the entire continental North America," there’s still a big question mark as to how the large planes will fly from the relatively short 1,220 metre runway on Toronto Island and whether the airline would have to use Toronto’s Pearson airport for that fleet.
RBC Capital Markets analyst Walter Spracklin noted that CS100s may be able to take-off from runways as short as 1,219 metres, making it an ideal plane for the the small Billy Bishop airport, whose longest runway stretches 1,216 metres.
However, Spracklin says it appears the planes need 1,341 metres for landing, which would mean Billy Bishop's runways would need "significant rework" before the CS100 is able to fly from it.
"Porter could also be looking to deploy the CSeries from alternate airports, including Montreal, to destinations in the U.S. and significantly expand its footprint on those routes," he said.
"Regardless, the CSeries performance attributes again are driving new orders in the 100-149 seat segment; and should this order be confirmed, BBD is well on its way in securing close to 200 firm CSeries orders."
Wall Street Journal reporter Jon Ostrower said on Twitter late Monday that a deal for 12 CSeries 100 planes and the option for 18 more is set to be announced Wednesday, citing two unnamed sources familiar with the deal. The CS100 planes have as many as 125 seats, allowing Porter to expand the number of passengers per flight by 80 per cent.
The report suggests the order could be one announced in December, 2012, by Bombardier, and that the order was “attributed earlier to an ‘Americas’ customer.”
The Montreal-based aerospace company said at the time that it had signed a letter of intent to up 30 CS100 CSeries planes, worth up to $2.08-billion if all the aircraft are purchased.
The new CSeries line of aircraft is Bombardier’s attempt to compete with global giants Airbus and Boeing outside of its traditional categories of business jets and regional planes. The aircraft are designed to minimize noise and emissions and provide a lightweight alternative to competitors’ planes with the same range of seats.
Bombardier has delayed the launch of the smaller CSeries aircraft to June, 2014, followed by the larger 110- to 149-seat CS300 by December, 2014. The first flight is scheduled for the end of June.
So far, orders for the CSeries have fallen short of Bombardier’s hopes, with 148 firm orders. Other CSeries customers include Lufthansa, Swiss International Airlines and U.S-based Republic Airways.
Bombardier spokesman Marc Duchesne said late Monday that the company “cannot comment on industry speculation.” A Porter spokesperson could not be immediately reached for comment.
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