Blue skies for the little guy

Fall-Winter 2012

Thanks to shrewd business planning and an emphasis on customer service, Robert Deluce, BSc’71, has built Porter, his upstart airline company, into a force to be reckoned with.  

by Allyson Rowley,  BA’77

Porter Airlines CEO Robert Deluce

It’s a typical day for Robert Deluce, BSc’71, and he’s hard at work at three o’clock—in the morning. By the time he arrives at the office at 8:30, he’s already dealt with his email, gone for a jog, made it to the gym, finished a breakfast meeting, and planned his day.

Clearly, the Porter Airlines CEO knows how to get things done. And despite the odds, he’s managed to launch—and grow—a thriving regional airline, the third largest scheduled air carrier in Canada, which has flown more than seven million passengers in its six years of operation.

“He’s one of the world’s great aviation entrepreneurs,” says Karl Moore, an associate professor of strategy and organization at McGill’s Desautels Faculty of Management. Moore credits Deluce with the vision to see the opportunities that few others see—and the nerve to act on his instincts. “And of course, part of the fun is taking on Goliath,” says Moore of the spirited challenge Porter poses to the country’s biggest airline (Maclean’s once labelled Deluce “the man who’s driving Air Canada crazy”).

While many airlines fail, Moore points out that Porter Airlines’ successful start-up is in large part due to Deluce’s unique combination of strategic insight and chutzpah.

Not to mention 50 years of family experience. Born in northern Ontario, Deluce is the second eldest son of Stanley Deluce, who was inducted into Canada’s Aviation Hall of Fame in 2007. A Second World War veteran of the Royal Canadian Air Force, Deluce senior was a CPR engineer who loved hunting, fishing—and flying. In 1951, he and his wife Angela launched White River Air Services, which provided air transport services to remote communities across northern Ontario and Quebec.

A family passion

Enter a teenaged Robert Deluce, some years later. The first in his family to attend McGill, he arrives in Montreal from White River shortly after Expo ’67, with the idea that he might become a doctor. But he’s already passed his pilot’s exam at 17 (as did all six of his brothers), and he’s spent most of his summers and holidays working for his parents—fuelling, loading baggage, pumping floats, and generally being around aircraft most of his young life.

So, when he graduated in 1971, Deluce decided to go back home for a year and work full-time in the family business. Although his parents never pressured him, “you become a bit addicted to it, because it is an exciting field.”

So exciting, in fact, that the 21-year-old Deluce wasn’t able to attend his own graduation ceremony. “June was absolutely the busiest month of the year. It was all hands on deck,” he recalls. “I didn’t have the nerve to ask my parents for the time off!” (To this day, Deluce has yet to pick up his McGill diploma. “I will get it and I will frame it,” he vows.)

Fuelled by Stan, Angela and their nine children, White River Air Services grew from a small bush flying operation to a large regional airline that not only offered scheduled and charter flights across North America, but also supplied pilots and planes to clients around the world. White River helped launch NorOntair and Air Creebec, and the Deluce family would later acquire or partner in numerous other regional airlines, including Austin Airways, Air Ontario, Air Manitoba, Air Alliance and Canada 3000. Ultimately, the company partnered with and was bought out by Air Canada in 1987.

As for Deluce’s own career as an airline executive, “there really was no turning back” after that trial year when he returned home from college. “It does tend to get into your blood,” he says, adding: “It was something that worked out quite well.”

Indeed. He has been credited by some with having transformed Canada’s airline industry. “He exemplifies the northern Ontario can-do spirit, and his entrepreneurial drive and vision have changed the landscape for all who travel,” said Laurentian University president and vice-chancellor Dominic Giroux when the university awarded Deluce an honorary doctorate this spring. President of Deluce Capital Corporation since 1987, Deluce is now president and CEO of the privately held Porter Aviation Holdings Inc. and its wholly owned subsidiary, Porter Airlines Inc.

Making flying fun again

Porter flight attendants wear uniforms with a retro appeal

So, what’s the secret to Porter’s apparent success to date? From a convenient downtown location at Toronto’s Billy Bishop Airport, Porter offers short-haul flights in fuel-efficient small aircraft to 18 nearby destinations in central and eastern Canada and the northeastern U.S.

Oh, yes—and there’s this thing that was once called “service.” Fly with Porter from Billy Bishop and you’ll get free coffee, tea, snacks, newspapers, computer access and comfortable seating. And that’s before you’ve even left the ground. While in the air, there is free beer and wine, served in real glassware by flight attendants wearing pillbox hats and retro uniforms reminiscent of a time when flying was fun.

And leg room. Did I mention the leg room? Porter’s fleet consists of 26 Bombardier Q400s (the Q stands for “quiet”), all built in Toronto, each with 70 leather-upholstered seats, which give the lucky traveller “two to three inches more leg room than typical economy-class seating,” according to Porter’s website.

All of which ties in neatly with Porter’s name, which also hearkens back to a time when travel in general might have been fun. “The name really does derive from the traditional porter,” says Deluce, “whose role was to lighten your load, help you on your way, and make your trip less of a hassle.” Porter also offers a free shuttle bus from downtown Toronto to Billy Bishop, as well as quite possibly the world’s shortest scheduled ferry ride—only 121 meters (about 400 feet)—also free.

If nothing else, when you fly Porter from downtown Toronto, you could save a good $100 in ground transportation, not to mention the extra time to and from Pearson International Airport, Toronto’s main hub, located in Mississauga. (Renamed in 2009, the Billy Bishop Airport was previously known as both the Toronto City Centre Airport and the Toronto Island Airport.)

Launched on October 23, 2006, Porter has grown from a one-room operation with a half-dozen staff to its current 1,400 team members housed in a 14,000-square-metre terminal “arguably, during one of the toughest economic downturns that any of us have experienced,” Deluce is quick to point out.

Earning high marks

As Porter has grown, it has attracted the attention of airline watchers outside of the country. Porter is rated second in the world by Condé Nast Traveler’s Readers Choice Awards in the small airlines category. And it’s rated four stars (out of five) by Skytrax, a U.K.-based airline rating site. Only six airlines in the world get the full five stars. Porter’s two main Canadian competitors, Air Canada and WestJet, have garnered only three stars apiece.

Most importantly, of course, passenger numbers (and passenger satisfaction) have risen steadily. In July 2012, Porter set a new record load factor of 70.1 percent. (Passenger “load factor” refers to the ratio of revenue passenger miles to available seat miles.) And last fall, Porter scored 83 percent in customer satisfaction in the Ipsos 2011 Canadian Business Travel Study—the highest satisfaction for any airline in the study’s history and, again,
significantly higher than its competitors.

None of this, of course, came about without a bit of turbulence along the way. Originally, a bridge was to be built to the island airport. The plan, though, was highly unpopular with community advocates, who were concerned about the negative impact on the surrounding neighbourhoods—as well as the lost green space along the waterfront—if the under-used downtown airport were to be expanded. Political leadership changed hands at Toronto’s city hall and the decision to build the bridge was cancelled in 2003.

Deluce sued; an out-of-court settlement was reached. But the idea for the airline—and its prime location—had taken hold. REGCO Holdings Inc. (then owners of Porter Airlines) bought the airport terminal and evicted its one tenant, Air Canada Jazz. Porter’s new style of airline operations—with its promise of “flying refined”—was ready for take-off.

Deluce at an event in April celebrating Porter’s new service to Washington Dulles International Airport. The company also recently announced partnerships with airlines in South Africa and Qatar.

Continuing protests from some in the community (concerns were raised about noise from late-night flights) were contrasted by strong support from Bombardier and the Canadian Auto Workers. After its launch in 2006, Porter quickly established itself with the time-pressed business traveler and later the leisure traveller. By early 2010, Porter had opened a new $50-million terminal at Billy Bishop. Earlier this year, the Globe and Mail’s Marcus Gee wrote that Billy Bishop “is such a success and such an obvious asset for the city that it is hard to believe” that some once opposed the project.

Industry experts credit Porter with shrewd thinking for transforming the once sleepy island airport into a thriving aviation centre, and while Air Canada, after several court battles, recently won the right to return to the airport, it will now pay fees to its landlord—Porter Aviation Holdings. At least 85 percent of the planes flying to and from Billy Bishop will continue to belong to Porter Airlines.

Future plans include a pedestrian tunnel connecting the island airport to the city, pre-clearance by U.S. customs, and new service to several major American cities, including Detroit, Cleveland, Cincinnati, Pittsburgh and Philadelphia.

Deluce makes sure to point out that air travel is a necessity for many of the northern communities that Porter serves—not only to go on the trips and vacations that big-city folks might take for granted, but also to reach hospitals, universities and essential businesses. “We’ve added an alternative level of competition to so many cities, some of which had almost no competition. Fares have altered significantly and ridership is up by 80 to 100 percent,” he says.

To illustrate his point, Deluce tells the story of a customer in Timmins, who approached him after Porter had added service there earlier this year. “He thanked Porter for having been the ‘liberator’ of those who live and work there,” says Deluce, whose own family resided in Timmins for some 14 years. “While I was a bit amused by the term, I could appreciate their feelings.”

Deluce still keeps up his pilot licence and on occasion flies north in his own Cessna 185 float plane. “It’s as natural for me as being in a boat,” he says. Much like the airline’s distinctive mascot, Mr. Porter the raccoon, Deluce seems to be able to navigate quite well, no matter the environment.

“Raccoons are a bit cheeky. They’re determined and they thrive,” says Deluce, who notes the off-beat cartoon mascot is intended to balance out Porter’s otherwise buttoned-down, corporate image. When asked if the raccoon mascot might contradict Porter’s stated goal of restoring glamour and refinement to air travel, Deluce deadpans: “Some people might look upon it that way. On the other hand, he’s a classy raccoon.”

Deluce acknowledges that he’s had a few real raccoons in his own backyard from time to time. “No matter what you do, they always seem to come out on top,” he says. “Not a bad place to be.”

 

Allyson Rowley’s last article for the McGill News, about the 100th anniversary of the McGill Daily student newspaper, won the 2012 Prix d’Excellence Gold Medal for Best Writing (English) from the Canadian Council for the Advancement of Education.

 

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