The Lunch

Robert Deluce: Porter's airline boss who sees only blue skies

The Globe and Mail

Porter Airlines CEO Robert Deluce.

One way or another, Robert Deluce is accustomed to getting his way.

At the stately Fairmont Royal York Hotel’s Epic restaurant, Mr. Deluce doesn’t show any disappointment when he’s told a private room in the back is already booked for lunch. By the time our main course arrives, we will have a corner of the restaurant all to ourselves anyway, after the table of four next to us leaves.

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Whether you chalk it up to a streak of luck or shrewd planning, the chief executive officer at Porter Airlines Inc. has confounded skeptics with the regional carrier’s expansion at an urban airport located near Toronto’s downtown core.

On Sunday, Porter will mark the fifth anniversary of its launch at Billy Bishop Toronto City Airport, from where Porter’s shuttle buses take customers for free to the Royal York. Mr. Deluce has guided Porter through some tough times. The airline has become a case study for how a new entrant can carve out a niche in a volatile industry, from overcoming objections levelled by community activists in 2006 to weathering the 2009 recession to fending off the return of Air Canada at the island airport in 2011.

Mr. Deluce, 61, is an unwavering optimist when it comes to Porter’s quest for passengers.

“There’s a certain sense of accomplishment. Hitting our fifth birthday is something to celebrate,” he says, meticulously scooping out and relishing all the shiitake mushrooms from his oversized bowl, before consuming half of the broth.

Porter began with a monopoly on commercial flights at Billy Bishop, cornering the market from the underused airport after a terminal company controlled by Mr. Deluce ousted Air Canada from the site in early 2006. After a bitter court fight, Air Canada finally resumed service this past May, operating the Toronto-Montreal route.

Mr. Deluce isn’t worried. Porter has 172 of the Toronto airport’s 202 takeoff and landing slots daily, or a stranglehold over 85 per cent of the flights. He relishes being a thorn in Air Canada’s side. “We don’t have any baggage from earlier days. We bring a fresh new approach to customer service,” he says, noting that Porter flight attendants wear retro pillbox hats, a throwback to aviation’s glamour era in the 1960s.

Toronto will remain the primary hub for Porter, but the airline will be looking at expansion possibilities from Ottawa, Montreal and Halifax, too.

Mr. Deluce plans to more than double the number of planes in the airline’s fleet, which currently comprises 24 Bombardier Q400 turboprops. “The Q400 is a made-in-Canada story, built by Bombardier,” he says.

He won’t say exactly how long it will take to expand, but industry observers believe it’s realistic to think Porter will have 50 planes in its fleet within five years. Porter’s Q400s are decked out with leather seats, and there’s free wine and beer on board. The Toronto-based carrier doesn’t compete against Air Canada’s business class, preferring to stick to a single-cabin configuration of “premium economy.”

As well, Porter’s shuttle bus service is complimentary, and so is access to the island airport’s lounge, where customers can help themselves to free espresso, biscotti and WiFi service. Mr. Deluce says that instead of nickel-and-diming his customers, he’s aiming to “offer good value and a refined product,” including a snack box containing a muffin or sandwich on some flights. In-flight coffee is served in a bone china cup and wine or beer in real glassware.

“Most passengers are looking for something that will cut their appetite and allow them to be comfortable until they get somewhere to have their full meal,” he says, before tucking into his grilled halibut over a bed of lentils and heirloom beets. He finishes off the main course, right down to the last lentil.

Mr. Deluce has been a cunning trouble maker, so it’s fitting that Porter’s mascot is a cartoon of a raccoon. Porter had feuded with Toronto City Hall, especially former mayor David Miller, over a plan to build a bridge to the island airport. The bridge fracas has long subsided, and for the Porter CEO, it has been a case of no bridge, no problem.

“We’re not boxed in, in terms of expansion opportunities,” Mr. Deluce insists. He is confident that the fuel-efficient, 70-seat Q400 is the right plane to take the airline to the next level. “Others have tried the Boeing 737, but it’s a bigger aircraft. Even WestJet tried the 737 on some smaller markets and they weren’t able to sustain the routes with that size of airplane,” he says.

By late 2012 or early 2013, the Toronto island airport expects to gain approval from U.S. authorities for customs officers to pre-clear passengers. Porter needs U.S. customs agents at the island terminal to screen travellers bound for proposed destinations such as Washington’s Reagan National Airport.

Porter’s expansion has been hampered by the lack of a fixed link between the island airport and downtown. A ferry service takes passengers back and forth, but starting in 2013, customers will be able to use a new underground pedestrian tunnel, to be built by the Toronto Port Authority.

At the risk of spoiling his appetite for dessert, I raise the question of whether privately owned Porter is finally making money after years of losses. Porter suspended plans for an initial public offering in 2010, and again this year.

Mr. Deluce smiles and forecasts that the airline’s parent company, Porter Aviation Holdings Inc., will be profitable in 2011 – bolstered by terminal fees charged to Air Canada. The holding company, which lost $44.5-million between its launch and the first quarter of 2010, is the landlord to tenants leasing space at the island terminal. Since Air Canada’s return to Billy Bishop this past May, Mr. Deluce has benefitted from his rival’s presence. “We appreciate the extra fees and charges that Air Canada is paying to us,” he deadpans.

As our lunch wraps up, he gets oddly distracted by a rosemary plant at our table and declares: “Nice smell to it.” In the aviation world, however, Mr. Deluce isn’t so easily thrown off course. Porter launched with 200 workers and now has 1,300 employees. “People are feeling quite good about our anniversary, no matter whether you’ve been part of Porter since right from the beginning or if you’ve joined in the past year,” he says, just before allowing himself a single piece of vanilla biscotti for dessert, to go with his peppermint tea.

He has executed on a business plan that emphasizes Toronto island airport as a more convenient option for the corporate crowd than suburban Pearson International Airport, where Air Canada and WestJet Airlines Ltd. have their main hubs in Central Canada.

“We’ve had a strong team, right through to our chairman, Don Carty, and we raised $125-million to start, which definitely was a smart move. We didn’t make the classic mistake of trying to launch on a shoestring,” Mr. Deluce says. “We’ve come a long way in five years. On the other hand, we know there’s a lot of things yet to be accomplished and everyone’s up for that challenge. The next five years will be quite interesting.”

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CURRICULUM VITAE

Roots

Born in Chapleau, Ont., in 1950.

Second-oldest of nine children. Comes from a family with deep roots in aviation. He and his six brothers obtained their pilot licences as teenagers. Their father, Stanley, ran White River Air Services in Timmins, Ont.

Education

High school: Boarded at St. Michael’s College in Toronto.

Pilot: Began flying lessons in 1966, and still pilots his own four-seat Cessna 185 float plane.

Postsecondary: Bachelor’s degree in science, McGill University in Montreal.

Career

Immersed in aviation business as the Deluce family added regional carriers such as Austin Airways and Air Ontario to its holdings in the 1970s and 1980s. The family later sold its stakes in the carriers.

President of Canada 3000, from 1988 to 1995. Sold his interest in the charter airline long before it went under in 2001.

As CEO, he oversaw the launch of Porter Airlines Inc. on Oct. 23, 2006. Porter, which now has 1,300 workers, flew its five millionth customer this week.

Personal

His wife, Catherine, founded Chestnut Park Real Estate Ltd. in 1990, a leader in the carriage trade in Toronto and Muskoka.

Three sons and one daughter.

Two of the Deluces’ sons work at Porter: Michael is chief commercial officer, while Jason works in IT.

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