GEARING UP
Porter Airlines CEO mulls sale of Toronto Island terminal as IPO alternative.
Porter Airlines Inc.’ s chief executive says the decision to sell the passenger terminal at Toronto’s city centre airport is an alternative to going public as the company continues to hunt for new sources of capital more than four years after shelving plans for an initial public offering.
“It’s an alternative to doing an IPO, if you will,” Porter CEO Robert Deluce said in an interview with the Financial Post.
“We did look at an IPO a few years back, but this is really a good option in terms of an alternative to an IPO.”
Porter said last month it is searching for buyers for the terminal at Billy Bishop Airport, located on Toronto Islands near the city’s downtown.
The airline built the terminal prior to its launch in 2006 and has operated it ever since. It’s won accolades from passengers for its comfortable layout and perks like free coffee and cookies. But Mr. Deluce says he’d prefer to find an experienced private-sector company to operate it.
“I think there are some advantages to us now doing, with the appropriate person or with the appropriate firm, a sale-leaseback and getting back to just focusing on the airline,” he said.
Porter, being privately owned, doesn’t release its financial results, but Mr. Deluce says the airline is profitable. However, with a major expansion plan in the works it’s looking for new sources of capital.
The company attempted an IPO in 2010 but scrapped plans before they came to fruition, citing unstable markets.
And while he won’t entirely rule out the possibility that Porter will one day take another run at the public markets, Mr. Deluce said “there isn’t any real reason to pursue it” at this point.
In the meantime, Mr. Deluce said there has been a “good, strong response” from potential buyers of the Billy Bishop terminal.
“Pension funds, infrastructure funds, airport operators, financial investors, they’re all potential owners of this type of an asset,” he said.
If Porter sells the terminal, it will use the capital to fund its expansion plans, which include an ambitious scheme to begin flying Bombardier Inc.’s new CSeries jets to new destinations like Vancouver, Los Angeles and Miami that Porter’s existing turboprops can’t reach.
That plan, however, rests on Toronto city council approving an extension to the airport’s runway and is facing fierce opposition from critics who say it will increase noise, pollution and traffic around the city’s downtown.