Porter's Job Claims Mysteriously Double Overnight

Updated: Porter's Job Claims Unrealistic, Pale in Comparison to Toronto's Monthly Job Creation December 3, 2013 StartupValley_Photo_Job_2013-10-24TORONTO - We all want a strong and growing economy here in Toronto. And guess what? We already have it. We don't need jets on Toronto's waterfront for job growth. But let's take a closer look. Porter wants to double passengers at the Island Airport from 2 million to 4 million per year. By doubling passenger numbers, Porter-owner Deluce so far claimed he can create up to 1,000 jobs. That's supposedly on top of the existing 1,400 people Porter already employs. UPDATE: Desperate after a damming City staff report, Porter has quietly changed their talking points. Porter is now claiming that 2,000 jobs will be created through the expansion plans. Of course without giving any reason or explanation for the mysterious 100% jump… Ask yourself, would anyone pitching a serious business proposal make such a move? Porter_Photo_Email_Excerpt_2013-12-03

Toronto Creates 6,000 New Jobs - Every Month and Without Porter

Over the past 36 months (October 2010 - September 2013), Toronto has created a net of 216,000 new jobs ((StatCan: CANSIM Labour Force Survey database, retrieved 2013-10-26)). That means 6,000  new jobs every month on average. Now compare that to Porter's claim of 1,000 new jobs. That's a sixth of what the city adds in new jobs EVERY month.

Job Growth Would Defy Historic Trends at Porter, General Aviation Economics

The problem with Porter's claim of creating 2,000 new jobs: that's not how airport economics work. Academic studies have shown that the aviation industry benefits from economies of scale, wherein a 1% increase in passenger traffic does not necessarily result in a 1% increase in employment at the airport ((Gillen, Oum and Tretheway: research paper "Airline Cost Structure and Policy Implications", 1990)). In 2010, Porter had 933 employees ((The Globe and Mail: article "Porter revenue rises before IPO launch", 2010-05-25)) and transported 1.1 million passengers out of the Island Airport. In 2012 Porter employed around 1,400 people and had around 2.3 million passengers. That means headcount increased by 50% while passenger numbers grew 100%. Now Porter wants to grow passenger numbers by 100% again and increase the number of jobs by 71% - as opposed to sticking with a the historic 50% growth rate in jobs. So first they get more efficient and then less efficient in their operations? Using Porter's recent performance as the yardstick, job growth should be in the 400-500 vicinity. But somehow Porter claims 1,000 new jobs are in play - and now even 2,000. Apparently Deluce's math doesn't add up. It's also not clear where those alleged jobs would be created. Toronto or at new destinations like Florida or Vancouver? Will they be part-time or full-time? Porter of course doesn't say...

Taking Jobs Away from Pearson

The market for long-haul air travel from Toronto is limited. The idea that Porter can double passengers at the Island Airport without taking business away from Toronto Pearson is ludicrous and defies economic logic. Even if Porter is able to increase the market by enticing folks to fly that otherwise would stay home, most of their business has to come from Porter's competitor - Pearson Airport. Deluce even admitted that Porter is cannibalizing Pearson's business in past statements ((The Globe and Mail: article "Porter to remain dominant player at Island airport", 2011-03-07)). Pearson currently employs 40,000 directly ((Greater Toronto Airports Authority (GTAA): Annual Report, 2012)). Many of these are good paying, unionized jobs. With jet traffic migrating to the Island Airport, job numbers at Pearson will take a hit. And we're not even talking about jeopardizing the revitalization of Toronto's waterfront that has created 40,000 jobs.

Conclusion

Porter's claim to create 1,000 new jobs (or even 2,000) by putting jets on Toronto's waterfront is highly questionable given past developments and general economics governing the airline industry. Doubling the number overnight without giving any explanation reeks of desperation as Porter's bid is tanking at City Hall. But even if you take Porter's job claim at face value, these 2,000 jobs total pale in comparison to the 6,000 jobs Toronto has been creating every month for the past three years. Toronto already has a thriving economy. The last thing we need is to sacrifice our waterfront for Porter's jet plans.