By Nicole Mordant
(Reuters) - Short-haul carrier Porter Airlines has won another 16 takeoff and landing slots at Toronto's small downtown airport, beating out a rival application from Air Canada (ACb.TO: Quote), the country's biggest airline.
The award deepens Porter's dominance at the Billy Bishop Toronto City Airport, which is minutes from Toronto's financial center and therefore a convenient hub for business travelers.
Air Canada has 30 slots at the airport, which is on Toronto Island in Lake Ontario, to what will be Porter's expanded 172. Air Canada said it was disappointed that it had been "denied the opportunity" to expand its services.
"However, Air Canada remains committed to the Island airport, encouraged by the customer response we have received since resuming flights there this spring," spokeswoman Angela Mah said in an email.
Porter, a privately held airline that operates in Eastern Canada and into the United States, had a monopoly on flying out of Billy Bishop Airport until May, when Air Canada resumed services there.
Billy Bishop is the only airport that Porter operates from. Analysts have voiced concerns that Porter's business model could be under threat if Air Canada steps up competition at the airport.
Porter is looking forward to flying to new destinations, Chief Executive Robert Deluce said in a statement. Specific route announcements will be made as soon as plans for 2012 are finalized, he said.
Air Canada lost a court bid to get additional flying slots at Billy Bishop last year in the face of resistance from Porter and the Toronto Port Authority (TPA), the federal agency that owns and operates Billy Bishop airport.
ACL, a UK-based company specializing in airport slot allocation, selected Porter to take the slots at the airport, Geoff Wilson, president and chief executive of the TPA said in a statement.
The 16 slots were originally awarded to Continental Airlines, which gave them up when it merged with United to form United Continental Holdings (UAL.N: Quote).
Air Canada and the much smaller Porter were the only bidders for the vacant slots, Wilson said.
At the moment, Air Canada offers passengers 15 daily flights from the downtown airport to Trudeau International Airport in Montreal.