TORONTO - Jazz Air (TSX:JAZ.UN) has dropped lawsuits against the Toronto Port Authority and Porter Airlines over Porter's startup in 2006 at Toronto's City Centre Airport, but the wrangling over access to the landing strip just off the city's waterfront is not over.
Jazz, the regional carrier spun off from Air Canada (TSX:AC.A), had launched separate suits against the TPA and Porter in a fight that started over access to the downtown airport. On Tuesday, Porter and the port authority announced that suits filed against them in Ontario Superior Court had been withdrawn.
"This is an encouraging step and is consistent with the TPA's ongoing efforts to resolve any and all historical differences with various parties," Alan Paul, TPA acting president and CEO said in a statement.
"Now that the court case has been withdrawn, we can better focus our efforts on delivering and enhancing quality services for the people and businesses of Toronto."
But court proceedings continue in Federal Court, where Air Canada and Jazz argue they should be allowed fair and equal access to the airport. Jazz alleges it was frozen out by the TPA and Porter to eliminate competition.
"The bottom line is Air Canada is seeking fair and equal access to a federally owned and operated facility and that is why we are continuing with our case in the Federal Court," said Air Canada spokesman Peter Fitzpatrick.
"As a result of this situation we have incurred substantial damages that we will calculate in due course. Our ultimate aim is, as we have said publicly, to return to the island and resume service for our customers."
For its part, Porter said Tuesday it was pleased that Jazz dropped the Ontario claim against it, in which it had sought $10 million for an alleged conspiracy and breach of the Competition Act. It also said Jazz was responsible for Porter's costs during the lawsuit.
"The litigation by Jazz was entirely without merit and a heavy-handed attempt to overwhelm Porter when it was just starting up," said Porter founder and CEO Robert Deluce.
"Now that Porter is an established success, there was no purpose for Jazz to pursue these baseless claims. We are pleased with this victory and happy to put an end to this frivolous litigation."
But Porter has not dropped its own claim asking the court to sever ties between Jazz and Air Canada, alleging their capacity-sharing agreement is illegal and seeking $850 million in damages.
Jazz was originally a wholly owned subsidiary of Air Canada. But, after Air Canada reorganized under court supervision, they became a separate subsidiaries of the same parent company. Later still, they became separate public companies but still maintain capacity sharing agreements.
Jazz had operated out of the island airport until 2006, when it was evicted from its terminal by a company owned by Deluce.
