Porter: “handed a monopoly position at a public facility”

By Friday, March 18, 2016 0 No tags Permalink 0

This is an excerpt from an interview of Ben Smith, Air Canada’s president of passenger airlines, by Karl Moore, a professor of strategy and organization at the Desautels Faculty of Management at McGill University, and published by the Financial Post.

You can find the full interview at this address.

http://business.financialpost.com/executive/c-suite/air-canada-boss-speaks-about-learning-from-westjet-and-fighting-porter

“When it comes to Porter, I think they have a great product. The issue we have with Porter is not so much with the airline but more with the governance of how they went about gaining their position at Toronto’s Billy Bishop airport [also referred to as the island airport] in the city centre.

“The slot allocation process was done in a way that we’ve never seen in the Western world. [The airport has 202 daily slots– time periods when airlines can land or take off. Porter has 172 slots and Air Canada has 30, which they use for 15 round-trip flights to Montreal.] A private company was basically handed a monopoly position at a public facility and we continue to fight that. I believe we will prevail eventually.

“The Porter position stands in the way of competition. For example, we can’t compete with Porter on flights between Ottawa and downtown Toronto. We can’t compete with them on New York to the island because the way the governance is set up they’re protected from any of that. Meanwhile, they’re free to go and compete against us, or WestJet in any other market in the country. I think it will just take a U.S. carrier to wake up and say: ‘We’re going to come fly there’ and when they get rejected, the whole thing will unravel.”

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