Canadian carrier readies New York debut

/ Source: The Associated Press

A year-and-a-half old Canadian airline will soon expand into the highly competitive New York market, betting it can entice business travelers aboard its propeller planes with promises of convenience and premium perks like free beer and wine.

Starting March 31, Porter Airlines plans to offer seven daily weekday flights between its home base in downtown Toronto and New Jersey's Newark Liberty International Airport, just outside New York City. If all goes well, the carrier expects to launch additional flights to other U.S. business centers, such as Chicago and Boston, later this year.

The airline is backed by $125 million in private equity financing, and was able to turn a profit within less than a year of launching Canadian service in October 2006, executives said Thursday. Chairman Donald Carty, a longtime airline industry executive, said the new carrier aims to "restore the dignity and pleasure of air travel" and become the "most innovative North American short-haul carrier."

"Porter is probably the most exciting venture I've ever been a part of," he said.

Carty, who also serves as chief financial officer of computer maker Dell Inc. and chairman of U.S. carrier Virgin America, was chairman and chief executive of American Airlines parent AMR Corp. from 1998 until April 2003, when he resigned amid controversy over executive perks just after employees approved painful concessions.

Porter offers passengers three types of fares depending on flexibility, with the cheapest tickets going for $120 or less one-way. On the New York-Toronto route, the airline has already been forced to lower its fares in response to competition from Air Canada, Porter spokesman Brad Cicero said.

American Airlines, Continental Airlines Inc., Delta Air Lines Inc. and UAL Corp.'s United Airlines also offer direct New York-Toronto service.

While officials said early demand for the New York flights has been strong, the carrier's U.S. debut comes at a challenging time for the airline industry, which is coping with rapidly rising fuel costs, corporate travel cutbacks and the prospect of recession.

Airline consultant Darryl Jenkins said it was surprising to see an airline enter a new market like New York with such a large presence. Typically, a carrier might start with a couple of flights a day before ramping up its schedule, he added.

"I wish them well," Jenkins said. "That is a very aggressive start. They're going to either make a lot of money or go down swinging very quickly."

Porter aims to keep its prices competitive, but it's "not a fare-setter" going after the lowest possible price, Carty said. Rather, the single-class carrier is selling itself as a more convenient and classier alternative to standard air travel. Besides the complimentary drinks, Porter touts "premium snacks," leather-trimmed seats, extra leg room and an Internet-equipped passenger lounge.

Another selling point is the carrier's hub at Toronto City Centre Airport, located just minutes from the downtown financial district.

On the U.S. side, the airline said its relatively small and fuel-efficient Bombardier Q400 turboprop planes should be able to use underutilized runways at Newark, making it easier to get in and out of New York's congested airspace quickly.