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Court rejects Air Canada appeal of Toronto Island airport slots

Toronto-based regional carrier Porter Airlines controls 85 per cent of takeoffs and landings at Billy Bishop Toronto City Airport.

© Mark Blinch / Reuters/REUTERS

The Federal Court of Appeal has rejected Air Canada's attempts to loosen Porter Airlines Inc.'s stranglehold on flights at Billy Bishop Toronto City Airport.

The Toronto Port Authority, which oversees Billy Bishop, hired an independent consulting firm to award new takeoff and landing slots in 2010. But Air Canada was unhappy with the allocation: It received only 30 of the 90 slots handed out by Airport Coordination Ltd., an internationally accredited slot manager.

After Porter picked up 16 slots this year relinquished by Continental Airlines Corp. of Houston, the Toronto-based regional carrier now controls 172 slots, or 85 per cent of the airport's takeoffs and landings.

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Billy Bishop airport is "located on Toronto island. Once a quiet location frequented mainly by small aircraft and hobby fliers, it is now a bustling commercial airport. This transformation was years in the making," the Federal Court of Appeal noted in its 36-page ruling.

An air terminal company headed by Porter chief executive officer Robert Deluce ousted Air Canada from the island airport in 2006, but the country's largest airline returned in May this year with the Toronto-Montreal route. By contrast, Porter flies to 17 destinations from Billy Bishop.

Air Canada said it's reviewing the court's decision and declined further comment about the dismissal of the appeal of its application for judicial review.

Porter said the judgment reiterated that "agreements between Porter and the TPA were entirely appropriate and found no evidence of unfair treatment towards Air Canada."

Mr. Deluce said Tuesday that the long-running legal battles waged by Air Canada have been unsuccessful. "These attempts have repeatedly failed and we remain focused on ensuring that travellers have competitive choices for air service as Porter expands," he said in a statement.

The appeal court said there is nothing to indicate any flaws with the original Federal Court of Canada determination that the TPA and Porter have been engaging in normal and reasonable commercial activity, and not anticompetitive behaviour.

"In no way can the Toronto Port Authority be said to be woven into the network of government or exercising a power as part of that network," said the Federal Court of Appeal. "There is no statute or regulation that constrains the Toronto Port Authority's discretion."

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Since May, Montreal-based Air Canada has deployed Sky Regional Airlines Inc. to conduct its flights. Jazz Air previously flew at the island airport on behalf of Air Canada.

"By 2004, Jazz reduced the number of locations served and the frequency of flights," the appeal court said. "By 2005, it ceased shuttle bus services to the ferry by which passengers travelled to and from the City Airport and it used only six takeoff and landing slots." Jazz rejected the TPA's proposal for a new commercial operating agreement in early 2006, prior to the suspension of its flights.

In dismissing Air Canada's case, the court said the appellant must pay costs to be awarded for lawyers representing the TPA and Porter.

Privately owned Porter launched operations at the island airport in October of 2006.

"Porter's flights from the City Airport steadily increased," the appeal court said, adding that a Porter affiliate invested in a new terminal and expansion. "For the first time in more than two decades, the City Airport began to enjoy an operating profit."

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About the Author

Brent Jang is a business reporter in The Globe and Mail’s Vancouver bureau. He joined the Globe in 1995. His former positions include transportation reporter in Toronto, energy correspondent in Calgary and Western columnist for Report on Business. He holds a Bachelor of Commerce degree from the University of Alberta, where he served as Editor-in-Chief of The Gateway student newspaper. Mr. More

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