Air Canada in court over Toronto airport dispute

Tue Jul 6, 2010 4:36pm EDT
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By Nicole Mordant

VANCOUVER, British Columbia (Reuters) - Air Canada asked a Canadian court on Tuesday to scrap the recent award of take-off and landing slots at Toronto's downtown airport, arguing the allocation process was "fatally flawed."

The Toronto Port Authority (TPA) handed Porter Airlines a "permanent gift" when it gave the lion's share of the new slots to the tiny upstart, lawyers for Canada's biggest airline said.

"There was a total failure of the open and transparent process that was promised," Air Canada lawyer Neil Finkelstein told a federal court in Vancouver.

The TPA, a federal port authority that owns and operates the Billy Bishop Toronto City Airport, last month announced that Porter had secured 44 of the 90 new slots. Air Canada got 30 slots and U.S.-based Continental Airlines Inc 16.

The small airport is conveniently located just minutes from Toronto's city center and has become a hit with business travelers.

Porter, a private, regional airline founded in 2006, currently enjoys a monopoly on flying out of the airport, based on an agreement signed with the TPA in 2005.

Air Canada, through its regional feeder service Jazz Air, flew out of the airport until 2006 when it was evicted by the TPA and Porter. Air Canada and Jazz fly from much bigger Pearson Airport, some 45 minutes by car from downtown Toronto.

Porter's stranglehold at the island airport is causing "irreparable harm" to Air Canada, the airline said in court documents filed in February, as it is losing out on lucrative business travelers in the busy Toronto-Montreal-Ottawa triangle.   Continued...