Tuesday, October 24, 2006
New Airline Connecting City Centers: Welcome Porter Airlines! (GEEK POST)
[Let me caution you in advance: Everything after the first paragraph of this post scores a 7 out of 10 on the Walkman GEEK-ometer]
Yesterday, a new entrant airline called Porter Airlines started operating in Toronto, Ontario.
What's so unique about Porter, however, is that instead of operating from Toronto's primary airport (Pearson Int'l, aka "YYZ"), which is way out in the Toronto 'burbs, they're operating from a small airport called the City Center Airport (YTZ). YTZ sits on an island in Lake Ontario, just a couple hundred yards from Toronto's financial district. The ferry ride out to the island takes just eight minutes. Due to this short ferry ride, and the minimal security lines at YTZ, passengers need not leave their offices or homes two hours before their flight is scheduled to depart.
Although Porter launched service yesterday with flights only to Ottawa, its plan is to start adding destinations to city-centers within a 500 nautical-mile range of its Toronto base. As I'm sure you've figured out by now, Porter has positioned itself to attract primarily business travelers who would benefit most from the convenience of the airline's operating from YTZ, and in the future, from other small-ish city-center airports.
Why haven't existing airlines filled this niche yet? Simple. Most existing air carriers in North America are lemmings. They have no original ideas. Instead, they follow whatever the rest of the industry is doing, even if it's dumb.
To wit: Unless you haven't set foot on an airplane in the last six or eight years, you've noticed that all the airlines have blindly followed each other in replacing their turboprop airplanes with regional jets. Many of the Majors (and their affiliates and partners) have abandoned turboprops altogether. While it's true that regional jets are faster, quieter, smoother, and preferred by customers, one problem with regional jets is that the shortest flights aren't very profitable to operate.
Consider a business traveler who's trying to decide whether to either drive to Ottawa from Toronto (about 250 miles) or fly on an existing regional jet-serviced route (to the extent that they even exist on such short trips). Driving would take about four hours. But flying on a Major carrier's regional jet flight (which means going to the bigger, international airports with longer runways, that's far from the city center and takes a long time to get checked in and through security), it would take about 3.5 hours (leave office two hours before the flight to arrive one-and-a-half hours before the flight, one hour flight, and thirty minutes from the airport to the destination in Ottawa). Given that the times are about the same, but the costs to fly would be far greater, most business travelers probably would prefer to drive given those choices.
So when the Majors followed each other and ditched their turboprops for regional jets, they left a bunch of short flights (and profitable business passengers) unserviced or under-serviced.
Enter Porter. They saw that there were these very profitable customers who'd prefer to see city-centers get linked. While everybody else was giving their turboprops to the Salvation Army and whatnot, Porter placed an order for a whole mess of Bombardier Q400 turboprops. These suckers are somewhat big (seating 70), relatively fast for turboprops (cruising at 414 mph), extremely efficient to operate, and can land on very short runways (ideal for small, city-center airports).
With these efficient turboprops, Porter can operate from YTZ in Toronto (where customers need not leave their offices until, perhaps, 45 minutes or an hour before their flights), and can get customers from Toronto to Ottawa (door-to-door) in about two hours and fifteen or two hours and thirty minutes. This is a significant time savings over flying from YYZ or from driving the whole way. Porter may make sense.
The threats to Porter's success (and anyone else who follows in their footsteps) are numerous, however. First, people in Toronto are fighting the commercial use of the City Center Airport, citing safety and environmental concerns. Oddly, even the mayor has jumped on this bandwagon. So the use of this airport, and other similar airports that are close to city centers, is by no means a done-deal.
Second, it would be relatively easy for existing carriers to come in and compete on the same routes (note, though, that Porter is the only airline allowed to operate from YTZ in Toronto right now).
Third, existing carriers have proven fairly adept at retaining high-yield business travelers with frequent-flier programs and other retention initiatives. And Air Canada has begun selling airline trips in pre-paid bundles, which allow business travelers to buy a certain number of flights for a set price, and they may be used at virtually any time. For budgeting purposes, corporate travelers may prefer the predictability of these pre-paid, bundled tickets.
Fourth, Porter will always struggle to ensure that their operations are more efficient than driving or flying on the Major airlines out of bigger airports. Are there that many city-center airports within range of Toronto?(Not really.) What happens when increased traffic through City Center Airport in Toronto means it's not so much faster? What happens if Toronto succeeds at booting Porter out of the City Center Airport?
All-in-all, this will be an interesting experiment, to see if Porter can grow this business to connect city-centers efficiently and attract high-yield business travelers. If it works, similar operations could be successful in other high-density areas with convenient, city-center airports. Only time will tell...
Yesterday, a new entrant airline called Porter Airlines started operating in Toronto, Ontario.
What's so unique about Porter, however, is that instead of operating from Toronto's primary airport (Pearson Int'l, aka "YYZ"), which is way out in the Toronto 'burbs, they're operating from a small airport called the City Center Airport (YTZ). YTZ sits on an island in Lake Ontario, just a couple hundred yards from Toronto's financial district. The ferry ride out to the island takes just eight minutes. Due to this short ferry ride, and the minimal security lines at YTZ, passengers need not leave their offices or homes two hours before their flight is scheduled to depart.Although Porter launched service yesterday with flights only to Ottawa, its plan is to start adding destinations to city-centers within a 500 nautical-mile range of its Toronto base. As I'm sure you've figured out by now, Porter has positioned itself to attract primarily business travelers who would benefit most from the convenience of the airline's operating from YTZ, and in the future, from other small-ish city-center airports.
Why haven't existing airlines filled this niche yet? Simple. Most existing air carriers in North America are lemmings. They have no original ideas. Instead, they follow whatever the rest of the industry is doing, even if it's dumb.
To wit: Unless you haven't set foot on an airplane in the last six or eight years, you've noticed that all the airlines have blindly followed each other in replacing their turboprop airplanes with regional jets. Many of the Majors (and their affiliates and partners) have abandoned turboprops altogether. While it's true that regional jets are faster, quieter, smoother, and preferred by customers, one problem with regional jets is that the shortest flights aren't very profitable to operate.
Consider a business traveler who's trying to decide whether to either drive to Ottawa from Toronto (about 250 miles) or fly on an existing regional jet-serviced route (to the extent that they even exist on such short trips). Driving would take about four hours. But flying on a Major carrier's regional jet flight (which means going to the bigger, international airports with longer runways, that's far from the city center and takes a long time to get checked in and through security), it would take about 3.5 hours (leave office two hours before the flight to arrive one-and-a-half hours before the flight, one hour flight, and thirty minutes from the airport to the destination in Ottawa). Given that the times are about the same, but the costs to fly would be far greater, most business travelers probably would prefer to drive given those choices.
So when the Majors followed each other and ditched their turboprops for regional jets, they left a bunch of short flights (and profitable business passengers) unserviced or under-serviced.
Enter Porter. They saw that there were these very profitable customers who'd prefer to see city-centers get linked. While everybody else was giving their turboprops to the Salvation Army and whatnot, Porter placed an order for a whole mess of Bombardier Q400 turboprops. These suckers are somewhat big (seating 70), relatively fast for turboprops (cruising at 414 mph), extremely efficient to operate, and can land on very short runways (ideal for small, city-center airports).
With these efficient turboprops, Porter can operate from YTZ in Toronto (where customers need not leave their offices until, perhaps, 45 minutes or an hour before their flights), and can get customers from Toronto to Ottawa (door-to-door) in about two hours and fifteen or two hours and thirty minutes. This is a significant time savings over flying from YYZ or from driving the whole way. Porter may make sense.
The threats to Porter's success (and anyone else who follows in their footsteps) are numerous, however. First, people in Toronto are fighting the commercial use of the City Center Airport, citing safety and environmental concerns. Oddly, even the mayor has jumped on this bandwagon. So the use of this airport, and other similar airports that are close to city centers, is by no means a done-deal.
Second, it would be relatively easy for existing carriers to come in and compete on the same routes (note, though, that Porter is the only airline allowed to operate from YTZ in Toronto right now).
Third, existing carriers have proven fairly adept at retaining high-yield business travelers with frequent-flier programs and other retention initiatives. And Air Canada has begun selling airline trips in pre-paid bundles, which allow business travelers to buy a certain number of flights for a set price, and they may be used at virtually any time. For budgeting purposes, corporate travelers may prefer the predictability of these pre-paid, bundled tickets.
Fourth, Porter will always struggle to ensure that their operations are more efficient than driving or flying on the Major airlines out of bigger airports. Are there that many city-center airports within range of Toronto?(Not really.) What happens when increased traffic through City Center Airport in Toronto means it's not so much faster? What happens if Toronto succeeds at booting Porter out of the City Center Airport?
All-in-all, this will be an interesting experiment, to see if Porter can grow this business to connect city-centers efficiently and attract high-yield business travelers. If it works, similar operations could be successful in other high-density areas with convenient, city-center airports. Only time will tell...
Comments:
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Please recalibrate the Walkman Geek-o-meter. This is 9.5 out of 10.
That being said, how is the ride on one of these Bombadier Q400's?
That being said, how is the ride on one of these Bombadier Q400's?
# posted by 
: 1:51 PM
: 1:51 PM
Not bad, actually. Fairly quiet, and as stable as a regional jet in turbulence. They're not cheap, either!
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