Air Canada and WestJet Airlines Ltd , in recovery mode after the recession, are stepping up their fight for passengers against Porter Airlines Inc. in the vital battleground of Central Canada.
Calin Rovinescu, Air Canada's chief executive officer, said Thursday that he is keen to resume service at Billy Bishop Toronto City Airport, possibly by the end of 2010. Porter has held a monopoly on commercial flights at the island airport near Toronto's downtown business core since it launched operations in October, 2006.
Air Canada is slated to deploy its regional Jazz affiliate to fly from Billy Bishop, and Mr. Rovinescu said the airline will be holding talks with the Toronto Port Authority, which oversees the awarding of takeoff and landing slots at the island airport.
He made the comments during a conference call Thursday, after announcing that Air Canada posted an operating profit of $75-million in the second quarter, an improvement over an operating loss of $113-million in the same period last year.
However, the Montreal-based carrier lost $203-million in the quarter, when taking into account a $54-million charge for interest expenses and foreign-exchange losses of $156-million. In the same period in 2009, Air Canada earned $155-million, aided by foreign-exchange gains of $355-million.
WestJet, meanwhile, has transferred its vice-president of sales, Duncan Bureau, to Toronto to oversee the Calgary-based carrier's service from Toronto's Pearson International Airport. WestJet has been attempting to lure leisure and business travellers with discounted fares on the eastern triangle of Toronto, Montreal and Ottawa. Air Canada also flies from Pearson, the country's largest airport.
"We're seeing growth on the eastern triangle," Porter CEO Robert Deluce said Thursday. "Passengers are appreciating the service and competition that we're bringing to the market."
Mr. Bureau's move to Toronto "will hopefully accelerate our presence in the Southern Ontario market, where most of our corporate accounts reside," WestJet CEO Gregg Saretsky said.
WestJet also released results Thursday, posting a $21-million profit in the second quarter, up from $9.2-million a year earlier. Despite the increase, the airline said uncertainty about the economy prompted it to delay the delivery of three aircraft.
WestJet, founded in 1996, expanded to Ottawa and Hamilton in 2000 and then launched service in Toronto in 2002. "Our growth in Southern Ontario hasn't been as rapid as our growth in Western Canada," said Mr. Saretsky, who added that Toronto is a crucial hub for WestJet's expansion into the U.S., Mexico and Caribbean.
The load factor, or the proportion of seats filled by paying customers, rose at Canada's two largest carriers.
WestJet's load factor was 80.7 per cent in July, up from 76.4 per cent in the same month of 2009.
Air Canada's July load factor, including Jazz, rose to 84.9 per cent from 83.6 per cent. The latest load factor marked a record high for the month of July at Air Canada and Jazz.
Versant Partners Inc. analyst Cameron Doerksen said Air Canada stock could face short-term selling pressure if some shareholders in ACE Aviation Holdings Inc., which owns 27 per cent of the carrier, eventually unload their Air Canada shares. But longer term, Air Canada stock should get a lift after ACE unwinds as a holding company, he said.