BRENDAN SOBIE / WASHINGTON DC
Canada's prospective Bombardier Dash 8 Q400 customer Regional Airlines Holdings (REGCO) claims to have lined up C$550 million ($345 million) in financing from a team of investors to support the launch of a Toronto-based carrier in the fourth quarter of 2003. However, the whole deal pivots on a bridge being built to Toronto City Centre Airport.
REGCO chief executive Robert Deluce says his holding company is prepared to finance an order for 15 Q400s, at a total cost of about C$450 million. He says REGCO is also offering to finance the C$20 million bridge that the company says must be built to connect downtown Toronto with its proposed city airport hub, Toronto City Centre Airport, along with a new C$30 million terminal. Passengers currently reach the airport by ferry. In return, Deluce wants most of the unused slots at City Centre, which has been threatened with closure in the past.
Deluce Capital has lined up four major investment partners, including aircraft lessor CIT Aerospace and Canadian investment firm KVN. It also has support from Bombardier unions that believe the potential aircraft order will help keep the manufacturer's 1,200-employee turboprop line running. "The order comes at an important time for Bombardier," notes Deluce, with only seven Dash 8s currently on the orderbook for next year (Flight International, 8-14 October).
REGCO hopes to order 15 Q400s within the next month, pending Toronto City Council approval of the bridge. "We'll put our firm orders on the aircraft when there is certainty to the bridge construction. The aircraft take about the same lead time as the bridge. We don't need the new terminal from the start. The bridge is needed from day one to make the airport viable." REGCO finance of the bridge and terminal would be paid back through passenger facility charges, and in the event of failure it would still have to honour the agreement. The City Council has previously balked at approving a bridge, afraid that traffic projections would not materialise and taxpayers would be left footing the bill.
Source: Flight International
